Ms Skg Infratech PVT LTD vs. State Of Haryana And Others

Facts

The petitioner, M/s SKG Infratech Pvt. Ltd., filed a writ petition seeking additional payment for the impact of an increased GST rate from 12% to 18% on works contract services rendered to a government authority, HSVP, for the period between January 1, 2022, and July 17, 2022. The GST rate was increased by Union Government notifications effective January 1, 2022. While the Haryana government agreed to pay the enhanced GST rate for contracts entered into before July 18, 2022, where payment was made after that date, HSVP applied this enhanced rate only from July 18, 2022, instead of the earlier effective date of January 1, 2022. The petitioner argued that HSVP, being a 'Government Authority', should have been subject to the 18% GST rate from January 1, 2022.

Held

The Court disposed of the petition based on the statements made by both parties. The respondent Nos. 2 to 9, through their counsel, assured the Court that the competent authority would reconsider the matter and initiate corrective measures if necessary. The petitioner agreed to this arrangement. The Court directed that the needful be done within two months from the date of the order. The specific finding on whether the petitioner was legally entitled to the additional payment from January 1, 2022, was not explicitly determined, as the matter was resolved through the respondent's undertaking to reconsider and take corrective action. The ratio decidendi is that when a respondent authority undertakes to reconsider a matter and take corrective action, a High Court may dispose of a writ petition on that basis, directing expeditious action.

Key Issues

1. Whether the petitioner is entitled to additional payment on account of the increased GST rate from 12% to 18% for works contract services rendered to HSVP for the period January 1, 2022, to July 17, 2022, considering the effective date of the rate change under Notification No. 22/2021-Central Tax (Rate) dated December 31, 2021. Petitioner's contentions: The petitioner argued that Notification No. 22/2021-Central Tax (Rate) dated December 31, 2021, excluded 'Government Authority' from the 12% GST rate, making it liable for 18% GST from January 1, 2022. HSVP falls under this definition. The respondent's communication dated February 1, 2023, acknowledged the increased rate for contracts entered before July 18, 2022, with payments made thereafter, but the petitioner contended that January 1, 2022, should have been the cut-off date, not July 18, 2022. Revenue/State's contentions: Counsel for respondent Nos. 2 to 9 stated that the competent authority would reconsider the matter and initiate corrective measures if necessary, upon being confronted with the relevant notifications and communications.