Vishal Verma vs. Union Of INDIA Th Its Secretary Defence New Dehli And Others

Held

The High Court dismissed the review petition. Regarding the first issue, the Court found no merit in the argument that Special Condition 49 of the tender document, which provided for adjustment of differential tax amounts due to rate changes, was overlooked or contrary to Section 13 of the CGST Act. The Court noted that this condition was not under challenge in the original writ petition, nor was any argument made regarding it during the initial hearing. Concerning the second issue, the Court clarified that SRO-GST-11 dated July 8, 2017, initially taxed construction services under Heading 9954 at 18%. While SRO-GST-2 dated August 22, 2017, did bring changes to GST rates for specific types of composite works contracts supplied to government entities (like historical monuments, canals, pipelines), it did not alter the 18% rate for the general composite supply of works contracts, which was applicable to the petitioner's case. The reduction from 18% to 12% was effected by the notification dated September 21, 2017. The Court reiterated that the issues were already settled by previous judgments, and the petitioner's arguments did not warrant a review. No specific issue was left undecided.

Facts

The petitioner, Vishal Verma, proprietor of M/s Kiran Constructions, sought a review of a High Court judgment that dismissed his writ petition. The original writ petition challenged a demand for differential Goods and Services Tax (GST). The petitioner had submitted bids for construction contracts after a GST Council recommendation to reduce the rate on works contract services from 18% to 12%, but before the formal notification on September 21, 2017. The bids were accepted and work commenced after the notification. The respondents, including various military engineering services authorities, issued letters demanding the differential tax amount. The petitioner argued that the work orders were issued after the rate reduction and that a specific tender condition was contrary to GST law. He also contended that SRO-GST-2 dated August 22, 2017, already set the rate at 12% for works contracts, making the subsequent notification inapplicable.

Key Issues

1. Whether the High Court erred in not appreciating that the work orders were issued after the GST rate reduction notification dated September 21, 2017, and that Special Condition 49 of the tender document was contrary to Section 13 of the CGST Act, 2017, regarding the time of supply? (Petitioner's contention: The petitioner argued that the issuance of work orders post-notification and the invalidity of Special Condition 49, which dictates tax rate adjustments based on tender conditions rather than statutory provisions, were overlooked. They relied on Section 13 of the CGST Act, 2017, to assert that tax liability arises at the time of supply, irrespective of tender conditions.) 2. Whether the High Court erred in not appreciating that SRO-GST-06 dated September 21, 2017, did not reduce the GST on Works Contract, and that SRO-GST-02 dated August 22, 2017, already governed works contracts at 12%? (Petitioner's contention: The petitioner argued that the notification dated August 22, 2017, already fixed the GST rate for works contracts at 12%, and the subsequent notification of September 21, 2017, was therefore not applicable to their bids, which were made considering the 12% rate.) (Revenue's contention: The respondents argued that all issues raised by the petitioner had already been decided by previous judgments of the High Court, specifically in WP(C) No. 2183/2019 and WP(C) No. 170/2021, and therefore, the review petition lacked merit.)