Vriddhi Infratech INDIA PVT. LTD. vs. The Executive Engineer
Held
The Court found the additional 3% deduction, over and above the actual VAT on materials, to be prima facie improper without a clear basis for determining the subsumed VAT liability. It quashed the impugned order (Ext.P7) and remitted the matter to the 2nd respondent for fresh consideration, after affording the petitioner an opportunity of hearing.
Facts
The petitioner submitted tenders for works in the pre-GST regime, which were completed post-GST. The Central Public Works Department (CPWD) agreed to compensate for the GST component, subject to reducing pre-GST taxes (subsumed in GST) from the quoted amount to determine the base for compensation. The dispute arose because CPWD, while calculating the base price, reduced VAT on materials and an additional 3% on the entire works contract, which the petitioner challenged.
Key Issues
The key issue was the methodology adopted by CPWD to calculate GST compensation, specifically the legality and basis for deducting an additional 3% from the quoted amount after accounting for VAT on materials, to arrive at the base price.
Sections Cited
Rule 10 of the Kerala Value Added Tax Rules
AI-generated summary — verify with the full judgment below
Heard together (2 matters)
Read from the judgment's own cause title. This page is filed under one of them.
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. FRIDAY, THE 13TH DAY OF JANUARY 2023 / 23RD POUSHA, 1944 WP(C) NO. 26389 OF 2022 PETITIONER: M/S.VRIDDHI INFRATECH INDIA PVT. LTD., PLOT NO. 330/1, GROUND FLOOR, ROAD NO. 25, BANJARA HILLS, HYDERABAD – 500 034, TELANGANA REPRESENTED BY ITS VICE PRESIDENT, VENKATA RATNA PRASAD Y. RESPONDENTS: 1 THE EXECUTIVE ENGINEER, CENTRAL PUBLIC WORKS DEPARTMENT (CPWD), OFFICE OF THE EXECUTIVE ENGINEER, IISER TVM PROJECT DIVISION - I, MELETHUMELE, VATTIYOORKAVU P.O, THIRUVANANTHAPURAM – 695 013. 2 THE DIRECTOR GENERAL, CENTRAL PUBLIC WORKS DEPARTMENT (CPWD), A-WING, ROOM NO.- 101 NIRMAN BHAWAN, NEW DELHI – 110 011. 3 THE CHIEF ENGINEER, CENTRAL PUBLIC WORKS DEPARTMENT (CPWD), C.G.O. COMPLEX, POONKULAM, VELLAYANI P.O, THIRUVANANTHAPURAM – 695 522. ADV.P.R.AJITH KUMAR THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13.01.2023, ALONG WITH WP(C).25732/2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C) NOS. 26389 & 25732 OF 2022 2 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. FRIDAY, THE 13TH DAY OF JAN
The judgment continues below.
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