HC stays PNGRB order on GMR Energy's complaint against RGTIL

The Delhi High Court today stayed the order of the Petroleum and Natural Gas Regulatory Board (PNGRB) directing Reliance Gas Transportation Infrastructure Ltd (RGTIL) to ensure access to GMR Energy Ltd to its pipeline for transportation of natural gas from west coast to its power plant in Andhra Pradesh.
A bench of Justice Manmohan stayed the November 11, 2013 order of the Board after the Fertilizers Association of India (FAI), an association of 22 fertilizer units, moved a petition saying the order would result in burdening them with additional liability of about Rs 540 crores.
The petition said the order is only to benefit GMR and the decision of the Board was taken without hearing the Centre or any other affected party, which is against principle of natural justice.

PNGRB had in its order last year directed RGTIL to provide within 40 days access to GMR Energy under the provisions of PNGRB (Access Code for Common or Contract Carrier Natural Gas Pipeline) Regulations, 2008.
PNGRB had passed the order on the complaint of GMR Energy against RGTIL, which is operating a common carrier pipeline, in which it has said that RGTIL was not providing it open access to transport natural gas from west coast to its power plants in Andhra Pradesh.
FAI said in its petition that the order of the Board would "burden the fertilizer units with additional liability of about Rs 540 crore to exclusively benefit power units and irreparably prejudicing fertilizer units by covering central sales tax of two per cent being imposed upon such transactions to state sales tax at the rate of 14.5 per cent."

It said "the Board passed the order without hearing FAI or the Union of India significantly when the impugned directions do not make the said arrangement tax/revenue neutral and convert a Central Sales Tax arrangement to State VAT contrary to the guidelines of swapping natural gas issued by the ministry.