Dhiraj Bania vs. The State Of Assam And 7 Ors

Held

The Court held that Circular No. 3/2017-GST dated August 24, 2017, is in accordance with Sections 12 and 13 read with Clause 6(a) of Schedule II of the GST Act and CGST Act. Consequently, the petitioners are liable to pay GST at 6% under the GST Act and 6% under the CGST Act for invoices raised on or after July 1, 2017, for which payments were received or were receivable on or after that date. Directions previously issued to deposit GST at 12% in such cases were deemed in accordance with law, and interim protection orders no longer survive. Deductions made by respondents from bills for invoices issued on or after July 1, 2017, were also deemed lawful, and no writ would be issued to release such deducted amounts. However, petitioners can claim release of deducted amounts if they can demonstrate to the authorities that invoices were raised before July 1, 2017, as per Circular No. 3/2017-GST. Regarding the claim for enhancement of contract value under Section 64A of the Act of 1930 due to GST applicability, the Court found insufficient materials to decide. Petitioners are granted liberty to submit representations to the awarding authorities with supporting materials, and these representations must be considered within six months, taking into account the judgment's observations regarding reimbursement of the additional tax component.

Facts

This judgment concerns a batch of seven writ petitions challenging the deduction of taxes on contracts awarded before the Goods and Services Tax (GST) regime but billed and paid for after its implementation. The petitioners, contractors, argue that deductions should be made under the Assam Value Added Tax Act, 2003, not the Assam Goods and Service Tax Act, 2017. The core dispute revolves around whether GST is applicable to these post-July 1, 2017, invoices and payments, and if so, whether the petitioners can claim the additional tax burden from the respondent authorities. The petitioners are contractors who entered into agreements prior to July 1, 2017, but their bills and payments were processed after this date.

Key Issues

1. Whether the deduction of tax in respect to the petitioners should be made in terms of the Assam Value Added Tax Act, 2003, or the Assam Goods and Service Tax Act, 2017, considering contracts were awarded prior to July 1, 2017, but bills and payments were made post-implementation of the GST Act. 2. Whether the petitioners are liable for payment of GST on invoices and payments raised and received after the coming into effect of the GST Act. 3. If the petitioners are liable to pay GST, do they have a right to claim the additional tax in the form of GST from the respondent authorities. Petitioner's arguments: The petitioners contend that since the contracts were awarded before the GST regime, the older VAT Act should apply. They question their liability for GST on transactions that occurred post-GST implementation and seek to recover any additional tax burden from the respondents. Revenue's arguments: The judgment does not explicitly record arguments from the revenue or state respondents. However, the court's findings suggest the revenue's position likely supported the application of GST for transactions post-July 1, 2017, and the validity of deductions made on that basis.