Anusha Manpower Services vs. The State Of Andhra Pradesh

Held

The Court treated the impugned proceedings, described as a notice by the 3rd respondent, as a show cause notice for recovery proceedings. The petitioner was granted liberty to submit their explanation within two weeks of receiving the order. Upon receipt of the explanation, the 2nd and 3rd respondents were directed to proceed with the inquiry and other proceedings strictly as per law. The Court explicitly stated that no coercive steps would be taken against the petitioner until a final decision is taken by the authorities. The Court clarified that it had not adjudicated on the merits of the case and that the authorities were to make an independent decision regarding the recovery of any excess GST amount. The writ petition was disposed of on these directions.

Facts

The petitioner, a contractor who supplied 'prasadams' to the 3rd respondent temple between 21.11.2020 and 20.11.2021, received a notice from the 3rd respondent demanding repayment of Rs.7,26,601/- out of an alleged excess GST amount of Rs.10,26,601/- paid to the petitioner. The petitioner contends that the notice was issued based on an internal direction from the 2nd respondent without providing any opportunity to the petitioner. The petitioner claims that as per the tender terms, GST was to be paid by the contractor alone, and they received the negotiated price after completing the work, from which GST was paid to the government. No extra GST was claimed from the temple. The petitioner also notes that a subsequent tender for 2022 specified that tender rates would be inclusive of GST, unlike the earlier tender.

Key Issues

1. Whether the impugned notice dated 04.04.2022 issued by the 3rd respondent, demanding repayment of Rs.7,26,601/- towards excess GST paid to the petitioner for the period 21.11.2020 to 20.11.2021, is legally sustainable in the absence of a proper show cause notice and an opportunity of hearing to the petitioner? Petitioner's arguments: The petitioner argued that the notice demanding repayment was issued without any prior notice or opportunity to present their case, violating principles of natural justice. They asserted that they had paid GST from the negotiated price received after completing the tender work and had not claimed any excess GST from the temple. They highlighted a change in tender terms for a subsequent period, implying a different understanding of GST liability. Revenue/State's arguments: The learned Standing Counsel for the 3rd respondent argued that the contractor was paid the tender amount inclusive of GST, and it was the contractor's sole responsibility to pay GST. Therefore, an excess amount was paid previously, justifying the recovery proceedings initiated through the impugned notice.