Tvl S V Perumal vs. The Secretary TO Government
Original PDF →Facts
The petitioner, Tvl.S.V.Perumal, a Civil Contractor, entered into contracts with respondents 4 to 9 (various government entities) prior to July 13, 2022. The contracts stipulated reimbursement of GST at 12%. Following Notification No.3/2022-CT(R) dated July 13, 2022, the GST rate increased to 18%. The petitioner, unable to pay the increased tax, had paid 12% so far. Despite representations to respondents 4 to 9, no response was received. The petitioner received notices from the third respondent (State Tax Officer) regarding demand (DRC 01A dated January 28, 2023) and GSTR 01 (March 16, 2024), followed by a personal hearing notice threatening demand confirmation.
Held
The Court held that the petitioner is entitled to temporary reprieve as they are being compelled to pay GST at the increased rate of 18% contrary to their contractual agreements, which were based on a 12% GST rate. This situation arose due to the statutory amendment increasing the prescribed tax rate via Notification No.3/2022-CT(R) dated July 13, 2022. The Court found that the petitioner's situation was similar to contractors in the cases of Vediappan vs. Secretary to Government and M.Murugesan vs. The Secretary to Government and others, where the Court had provided relief. Consequently, the Court directed respondents 4 to 9 to consider the petitioner's representation dated July 11, 2024, within three months. Furthermore, all proceedings under the respective GST enactments were ordered to be kept in abeyance for a period of four months from the date of the order. The operative direction was to consider the representation and stay further proceedings.
Key Issues
1. Whether the petitioner is entitled to temporary reprieve from paying GST at the increased rate of 18% on contracts agreed upon at 12% GST, in light of the statutory intervention by Notification No.3/2022-CT(R) dated July 13, 2022? Petitioner's arguments: The petitioner contended that they are being forced to pay tax at 18% contrary to the agreed terms in their contracts, which stipulated 12% GST reimbursement. They relied on previous judgments of the High Court in similar circumstances, specifically citing Vediappan vs. Secretary to Government and M.Murugesan vs. The Secretary to Government and others. The petitioner sought a direction to respondents 4 to 9 to implement Government Order G.O.Ms.No.114 and pay GST at 18% on bills claimed after July 18, 2022. Revenue's arguments: The judgment does not record any specific arguments from the revenue or state respondents.
Sections Cited
Notification No.3/2022-CT(R)
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Before: and
This Writ Petition is taken up for disposal, at the time of admission after dispensing with the notice to the respondents 2 to 9 as no adverse orders are proposed to be passed either against the petitioner or against the respondents.
The petitioner appears to be a Government Contractor, who had entered into contracts with the respondents 4 to 9, prior to the issuance of Notification No.3/2022-CT(R) 13.07.2022. 3. It appears that under the contracts signed with the respondents No.4 to 9, the GST component that has been agreed with to be reimbursed 12% and since the rate of tax has been increased to 18% in terms of Notification No.3/2022- CT(R) dated 13.07.2022, the petitioner is unable to pay tax at 18%.
The learned counsel for the petitioner submits that the petitioner has paid 3/8 https://www.mhc.tn.gov.in/judis tax at 12% so far.
It is submitted that the petitioner has also sent several representations to the respondents 4 to 9. However, it did not evoke any response.
The learned counsel for the petitioner submits that the petitioner has now received notice in DRC 01A dated 28.01.2023 from the third respondent, which has now been followed by notice in GSTR 01 dated 16.03.2024. 7. The learned counsel further submits that the third respondent has also now issued personal hearing notice dated 27.06.2024 threatening to confirm the demand.
In my view, the petitioner is entitled to temporary reprieve as the petitioner is being forced to pay the tax contrary to the agreement in view of the statutory intervention by way of amendment to the increase in prescribed rate of tax from 12% to 18% vide Notification No.3/2022-CT(R) dated 13.07.2024. 4/8 https://www.mhc.tn.gov.in/judis
Under similar circumstances also, this Court had come to the rescue of reported in [2023] 156 taxmann.com 324 (Madras) and in the case of 9095 & 13587 of 2023 dated 25.06.2024. 10. Considering the same, there shall be a positive direction to the respondents 4 to 9 to consider the respective representation dated 11.07.2024 of the petitioner within a period of three months from today.
Under these circumstances, all further proceedings under the provisions of respective GST enactments shall be kept in abeyance for a period of four months from today. This Writ Petition is allowed, with above directions. No costs. Consequently, connected W.M.P. is closed. Index : Yes / No 01.08.2024 Internet : Yes / No apd To 1.The Secretary to Government, Commercial Taxes and Registration Department, 5/8 https://www.mhc.tn.gov.in/judis Fort St. George, Chennai – 600 009. 2.The Assistant Commissioner (ST), Pudukottai-1 Assessment Circle, State Tax Division, Pudukkottai. 3.The State Tax Officer (Adjudication -I), O/o. Joint Commissioner (ST) (Intelligence), Trichy. 4.The Executive Officer, Ponnamaravathy Town Panchayat, GSTIN:33MRIE00251G1DC, 1, Main Road, Ponnamaravathy, Pudukottai – 622 407. 5.Thanjavur Smart City Limited, GSTIN 33AAGCT1450J1DQ, Arignar Anna Kalaiyarangam, Annasalai, Thanjavur – 613 001. 6.The Block Development Officer, Panchayat Union, GSTIN 33CHEP07165D1DC, Thirumayam – 622 001. 7.The Executive Officer, Peravurani Town Panchayat (SG), GSTIN 33CHET1288C1D6, 15, Pudhu Road, Peravurani Town Panchayat, Pudukottai District – 614 804. 8.The Project Officer, DRDA Pudukottai, GSTIN 33CHEP06911C1DL, 109/305/00378, Kattupudukkulam, Pudukkottai – 622 001. 6/8 https://www.mhc.tn.gov.in/judis
District Rural Development Agency, Thanjavur, GSTIN: 33CHED03105E1DI, 250, 2nd Floor, District Collector Office, Trichy Main Road, Thanjavur – 613 402. 7/8 https://www.mhc.tn.gov.in/judis C.SARAVANAN, J.
apd
2024 8/8 https://www.mhc.tn.gov.in/judis
Reproduced from the public record of the Madras High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.