Siddartha Constructions vs. Andhra Pradesh High Grade Steels Limited (Presently Ysr Steel Corporation Limited)

Held

The Court held that the petitioner is liable to pay GST at 18% on the taxable turnover from the contract with the 1st respondent, as confirmed by the Authority for Advance Ruling. The Court found that the petitioner's contention that the contract required the 1st respondent to reimburse the entire GST paid was not contradicted. Therefore, the 1st respondent is liable to reimburse the petitioner the differential amount of GST at 6% for the period during which the petitioner paid GST at 18% but was only reimbursed at 12%. The Court also directed that if any interest is recovered from the petitioner for late payment by GST authorities, the 1st respondent shall reimburse that as well. The Writ Petition was disposed of with a direction to the 1st respondent to complete the reimbursement within three months.

Facts

The petitioner, Siddartha Constructions, entered into a works contract with the 1st respondent, Andhra Pradesh High Grade Steels Limited (presently Ysr Steel Corporation Limited), on 23.11.2020. Initially, the petitioner paid GST at 12% on the turnover from this contract, believing the 1st respondent was a government entity eligible for concessional rates under specific notifications. However, tax authorities insisted on 18% GST, stating the notifications applied only to direct supplies to government entities, not government corporations. The petitioner sought an advance ruling, which confirmed the liability to pay 18% GST. Consequently, the petitioner paid 18% GST but was only reimbursed 12% by the 1st respondent. The petitioner approached the High Court seeking reimbursement of the differential 6% GST.

Key Issues

1. Whether the 1st respondent is liable to reimburse the petitioner the differential amount of GST paid at 18% instead of the 12% reimbursed, considering the contract terms and the Authority for Advance Ruling's decision? (Mixed question of law and fact, turning on contract interpretation and the implications of the advance ruling). Petitioner's contentions: The petitioner argued that the contract required the 1st respondent to reimburse the entire GST paid. They relied on the Authority for Advance Ruling's decision that mandated payment of 18% GST, and contended that the 1st respondent should reimburse the difference between the 18% paid and the 12% reimbursed. Revenue/State's contentions: No appearance was made by the 1st respondent, and therefore, no contentions were recorded from their side. The judgment does not record any arguments from the revenue or state authorities.