M/S. P. Samiappa Gounder And Bros vs. Public Works Department

Held

The Court held that the contract between the petitioner and the first respondent squarely falls within Clause 10(a) of G.O.Ms.No.296, dated 09.10.2017, and not Clause 10(c) as contended by the first respondent. The reasoning was based on the nature of the tender being item-wise. The Court referred to its previous judgments in W.P.Nos.21196 and 21198 of 2019, which dealt with similar facts and clearly held that parties were governed by Clause 10(a). These judgments were upheld by the Division Bench in W.A.(MD)No.1267 of 2021 and subsequently by the Supreme Court. Therefore, the Court concluded that the first respondent was bound to pay the GST component to the petitioner as per G.O.Ms.No.296 and the established precedents. The writ petition was allowed, directing the first respondent to consider the petitioner's representations and pass appropriate orders in terms of G.O.Ms.No.296 and the relevant judgments, consequently directing the remittance of the GST component to the petitioner. No order as to costs was made.

Facts

The petitioner, M/s.P.Samiappa Gounder and Bros., entered into a contract with the first respondent, Public Works Department, for a reservoir formation project. The contract was an item-wise tender. Following the introduction of GST on July 1, 2017, the State Government issued G.O.Ms.No.296, outlining GST calculation methodologies. The petitioner contended that the first respondent retained the GST component, causing them difficulty in timely payments to the second respondent (Commercial Taxes Department) and leading to demands for interest. Despite representations, the first respondent did not remit the GST component. The petitioner relied on previous High Court judgments where employers were directed to pay GST as per Clause 10(a) of the G.O.Ms.No.296. The first respondent argued that only Clause 10(c) of the G.O. applied, as they were awaiting revised administrative sanction due to GST rate revisions.

Key Issues

1. Whether Clause 10(a) of G.O.Ms.No.296, dated 09.10.2017, applies to the petitioner's item-wise contract, requiring the first respondent to remit the GST component to the petitioner. Petitioner's arguments: The petitioner contended that their contract was an item-wise tender, not a schedule of rates tender, and therefore Clause 10(a) of G.O.Ms.No.296, which deals with item-wise tenders where a break-up of taxes is furnished, should apply. They argued that the first respondent's contention that the petitioner should have included the GST component in their quotes was absurd, as GST came into effect after the tender was submitted. They relied on previous High Court judgments (W.P.Nos.21196 and 21198 of 2019 and W.P.(MD) No.15697 of 2020, upheld by the Supreme Court) which directed employers to pay GST as per Clause 10(a). Revenue/State's arguments: The first respondent argued that Clause 10(c) of G.O.Ms.No.296 was applicable to the contract, not Clauses 10(a) or 10(b). They stated they were awaiting revised administrative sanction due to GST rate revisions and that the value of subsumed tax had to be arrived at as per G.O.Ms.296, whichever was higher among Clauses 10(a), 10(b), and 10(c).