M/S. Brijnandan Singh Through Its Partner Brijnandan Singh vs. The Union Of INDIA And Ors

Held

The Court noted that the petitioners' grievance was limited to the payability of any differential amount arising from the implementation of GST. Upon review of Clause (vii) of the minutes of a meeting held on December 12, 2018, which was part of the State's counter-affidavit, the Court found that the petitioners' grievances had been redressed. The petitioners' counsel agreed that if Clause (vii) of the minutes of the Rural Works Department meeting was followed by all other works departments of the Government of Bihar, their grievances would be considered settled. The State counsel unanimously submitted that the petitioners should have no doubt regarding the decision in Clause (vii), which was based on revised SORs. Consequently, the Court held that no further adjudication was required as the petitioners' grievances were deemed redressed. The bound copies of the SORs (before and after GST) were to be kept on record.

Facts

The petitioners, M/s. Jai Bhawani Construction and others, filed multiple writ petitions challenging the burden of Goods and Services Tax (GST) on works allotted to them based on Schedule of Rates (SOR) that did not account for GST implications. They argued that the contract value, determined pre-GST, was being used to calculate GST, leading to a financial burden. The State Government contended that payments were being made after deducting 1% CGST and 1% SGST for works executed after July 1, 2017, and that a notification dated September 13, 2018, addressed the issue. The court requested the parties to submit SORs for both pre-GST and post-GST periods to clarify the contract values.

Key Issues

1. Whether the petitioners are being burdened to pay GST on works allotted based on SORs that did not account for GST implications, leading to a differential amount due to the implementation of GST? Petitioner's Argument: The petitioners argued that the original contract price, determined before GST, was being used to calculate GST, causing them financial hardship. They contended that the State Government was not deducting the subsumed taxes from the original contract price to arrive at the actual 'cost of the project' and that the provided guidelines and subsequent letters did not clarify the issue. Revenue/State's Argument: The State submitted that for works executed after July 1, 2017, payments were made after deducting 1% CGST and 1% SGST. They referred to a notification dated September 13, 2018, issued under Section 51 of the GST Act, and stated that directions had been issued to Executive Engineers to entertain claims in light of relevant circulars and guidelines. They also agreed to provide SORs for pre- and post-GST periods.