State-run oil marketing companies (OMCs)
Indian Oil Corporation and Hindustan Petroleum Corporation argued that Kerala government must forgo the sales tax of Rs 12 imposed on a litre of diesel.
The oil companies argued this in response to a petition filed by the Kerala State Road Transport Corporation (KSRTC) in the state High Court against these companies charging market determined price for bulk consumers of diesel.
The state road transport corporation wants oil firms to grant diesel subsidy. However, the oil firms asked the state to forgo the sales tax.
The petitioner submitted that in a similar situation in Tamil Nadu, the High Court had directed to provide diesel subsidy to state owned buses. The court had ordered interim injunction restraining charging of diesel at a higher rate.
According to the corporation, they are facing an acute financial crisis and there was deficiency of Rs 94 crore in a month and annual revenue gap of Rs 1,128 crore.
The restriction imposed by the government is discriminatory, it was stated.
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