J F Javid Hussain Government Civil Contractor vs. The Secretary TO Government

Facts

The petitioner, Tvl.J.F.Javid Hussain, a government civil contractor, filed a writ petition seeking a mandamus to direct respondents 3 and 4 (Tamil Nadu Housing Board Corporation and its Chief Engineer) to implement a Government Order (G.O.Ms.No.114) and their own Board Resolution (No.5.12). The petitioner claimed that while they were reimbursed GST at 12% by respondents 3 and 4 for government contracts, the actual tax payable was 18%. The petitioner had submitted representations on June 24, 2024, and July 19, 2024, to these respondents requesting adherence to the specified government order and board resolution. The petitioner also contended that as a service provider, they should not bear the incidence of GST, which is an indirect tax meant to be borne by the recipient.

Held

The Court disposed of the writ petition with a positive direction to respondents 3 and 4 to consider the petitioner's representations dated 24.06.2024 and 19.07.2024 expeditiously, within a period of 30 days from the receipt of the order. This consideration is to be made in light of Government Order G.O.(Ms).No.114 of the Commercial Taxes and Registration (B1) Department, dated 22.07.2024. The Court also directed respondents 1 and 2 (State Tax Officer and Secretary to Government) to keep all recovery proceedings pursuant to a press release in abeyance for a period of two months from the date of receipt of the order, pending the consideration by respondents 3 and 4. The Court did not make a specific finding on the exact GST rate dispute or the petitioner's liability to bear the incidence of tax, but rather directed the concerned authorities to consider the representations based on the cited government order. The ratio decidendi is that administrative authorities must consider representations based on relevant government orders and resolutions within a stipulated timeframe, and recovery proceedings can be stayed pending such consideration.

Key Issues

1. Whether respondents 3 and 4 are obligated to implement Government Order G.O.(Ms)No.114 dated 22.07.2024 and their own Board Resolution No.5.12 dated 23.06.2023 in relation to the GST reimbursement for services provided by the petitioner? (Question of law and fact) 2. Whether the petitioner, as a service provider, is liable to bear the incidence of GST at 18% when they are being reimbursed at 12% by the recipients (respondents 3 and 4)? (Question of law) Petitioner's arguments: The petitioner argued that respondents 3 and 4 should follow the Government Order and their Board Resolution, which would necessitate paying GST at the correct rate of 18%. They emphasized that GST is an indirect tax and the burden should fall on the recipient, not the service provider. The petitioner relied on G.O.(Ms).No.114 of the Commercial Taxes and Registration (B1) Department, dated 22.07.2024, and their own Board Resolution No.5.12 dated 23.06.2023. Revenue/State's arguments: The judgment does not record any specific arguments made by respondents 1 and 2 (State Tax Officer and Secretary to Government). The learned Standing Counsel for respondents 3 and 4 appeared, but their specific arguments are not detailed in the judgment.