D.B.S. Construction PVT. LTD. vs. The State Of Bihar
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The petitioner, D.B.S. Construction Pvt. Ltd., was awarded a contract in 2009, which was completed before 2015. The petitioner's grievance regarding admitted dues has been resolved. However, the respondents, authorities from the Rural Works Department of the Government of Bihar, deducted Goods and Services Tax (GST) at 18% from the payments. The petitioner contends that at the time the contract was executed and completed, Value Added Tax (VAT) was applicable, not GST, which was introduced later in 2018. The deduction of GST was made on the grounds that payments were being processed currently. The petitioner sought to withdraw the writ petition to approach the appropriate authorities for the refund of the allegedly illegally deducted GST.
Held
The Court noted that the petitioner's grievance regarding admitted dues had been redressed. However, the petitioner's primary concern was the deduction of GST at 18% for a contract awarded in 2009 and completed before 2015, arguing that VAT was applicable at that time. The petitioner sought to withdraw the writ petition with liberty to approach the appropriate authorities for a refund of the deducted GST. The Court allowed this withdrawal and disposed of the writ petition. The Court further directed the authorities to dispose of any representation made by the petitioner for the refund of GST strictly in accordance with law and expeditiously, preferably within eight weeks from the date of the representation. The issue of whether the GST deduction was illegal was not directly decided by the Court but was implicitly acknowledged by granting liberty to seek a refund.
Key Issues
1. Whether the deduction of GST at 18% is legally permissible for a contract awarded in 2009 and completed before 2015, when VAT was the prevailing tax regime. Petitioner's Argument: The petitioner argued that GST was introduced in 2018, and therefore, it could not be applied retrospectively to a contract completed prior to its implementation. The applicable tax at the time of contract execution and completion was VAT. The deduction of GST is therefore illegal. Revenue/State's Argument: The judgment does not record any specific arguments made by the respondents. However, their action of deducting GST implies a contention that the tax is applicable to the current payment processing, irrespective of the contract completion date.
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Cause title — parties, addresses and appearances
ORAL ORDER 7 25-06-2024 Learned counsel appearing on behalf of the petitioner has stated that though the grievance of the petitioner with regard to the payment of the admitted dues has been redressed, however, the authorities have deducted GST at the rate of 18% for the contract which was entrusted to them in the year 2009 and completed before the year 2015. Learned counsel has stated that at that point of time the Value Added Tax (VAT) was prevalent, however, the authorities have deducted GST which has come into effect in the year 2018 on the ground that the Patna High Court CWJC No.5708 of 2022(7) dt.25-06-2024 2/2 payments are being made now. Learned counsel seeks to withdraw the present writ petition with a liberty to approach the appropriate authorities for refund of the GST which has been illegally deducted.
Having regard to the same, the present writ petition stands disposed of as withdrawn with the aforesaid liberty. In case, the petitioner makes any representation for refund of the GST deducted, the authorities are directed to dispose of the same strictly in accordance with law as expeditiously as possible preferably within a period of eight weeks from the date of the said representation.
shakir/- (A. Abhishek Reddy, J) U
Reproduced from the public record of the Patna High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.