HARSHA DEVANI, J. - (1.) ALL these petitions involve similar questions of fact and law and the parties are also common, and hence, the same were taken up for hearing together and are decided by this common judgment. In all, there are three petitioners, viz. British Gas Exploration and Production India Limited, Reliance Industries Limited, and the Oil and Natural Gas Corporation Limited, who are collectively known as "the Contractor". All the three petitioners have filed individual petitions challenging orders passed by the Sales Tax Department against them. For the sake of convenience, reference is made to the facts as stated in Special Civil Application No.2084/2004 which has been filed by British Gas Exploration and Production India Limited. Wherever the facts are different, reference shall be made to the same at an appropriate stage.
(2.) THE petitioner - British Gas Exploration and Production India Limited (hereinafter referred to as "BGEPIL") is engaged in the business of exploration and production of oil and gas. On 22nd December, 1994, the Government of India, BGEPIL, Reliance Industries Limited (hereinafter referred to as "RIL") and Oil and Natural Gas Corporation Limited (hereinafter referred to as "ONGCL") agreed and executed two Production Sharing Contracts for development and exploration of PannaMukta and Mid -South Tapti Oil and Gas fields, in the west -coast off shore, India. Under the terms of the Production Sharing Contract (hereinafter referred to as "the PSC"), ONGCL, RIL and BGEPIL are collectively called "the Contractor". The PannaMukta gas production started from February, 1998 onwards.
(3.) IN accordance with the terms and conditions of the Production Sharing Contract for pursuing activities relating to exploration and exploiting oil and gas in Panna -Mukta oil/gas fields in the economic zone, the Union of India granted a licence to the joint venture. The terms of this grant are recorded in the PSC for Panna -Mukta oil/gas fields dated 22nd December, 1994. Under the terms of the contract, the ONGCL is entitled to share 40% of production of the minerals extracted and BGEPIL and RIL are to share 30% each of such production. The Panna -Mukta oil/gas fields are located in the area of economic zone as defined in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 (hereinafter referred to as "the Maritime Act"). Thus, the location of the said oil/gas fields is beyond the territorial waters of India. It is the case of the petitioners that under the PSC, the Contractor or any constituent thereof has no right to dispose of the natural gas produced by them. The entire production is the property of the Union of India, but, for the sake of providing adequate compensation to the Contractor, certain terms have been arrived at. Article 27 of the PSC clearly shows the title to the petroleum data and assets belongs to the Government of India and specifies that the Government is the sole owner of the petroleum products. The joint venture is merely a contract for exploration and production of natural gas as is clear from Article 27.1 of the PSC. Under the contract, the joint venture consisting of BGEPIL, RIL and ONGCL has a limited right of extraction and limited title to supply to the Government as more specifically set out therein. The entire production of natural gas goes to the Government of India and the Contractor or any constituent thereof have no control and no independence or volition to dispose of any mineral and are bound to hand over the production of natural gas to the Government of India. The PSC, therefore, is a contract arrived at for acquisition and disposal of minerals by the Government of India, who in public interest and the interest of consumers, controls the production, prices and distribution of natural gas.;