J Ambrose vs. The Director

Held

The Court held that the impugned order dated 20.06.2024 passed by the second respondent is a non-speaking order and cannot be sustained. The Court found that the order failed to consider the notifications cited by the petitioner and mechanically rejected the claim. The Court noted that the order did not address the rate of GST applicable on the date of the award of the works contract. Consequently, the Court quashed the impugned order. The matter was remanded back to the second respondent for fresh consideration. The second respondent was directed to provide an opportunity of hearing to the petitioner and pass a reasoned order considering all aspects within four weeks from the date of receipt of the order. The Court allowed the writ petition.

Facts

The petitioner, J. Ambrose, was awarded a works contract by CSIR - Central Electrochemical Research Institute (CECRI) for minor repair and painting works. The tender notification was issued in 2022. After completing the work and receiving payment in May 2023, the petitioner paid GST at 18%. However, the respondents sanctioned GST at only 12%. The petitioner sought reimbursement of the difference of 6% GST, amounting to Rs. 81,339.96, citing that the GST rate was 12% until July 18, 2022, and subsequently increased to 18% by Notification No. 3 of 2022, which was after the tender notification. The second respondent rejected this claim via an order dated June 20, 2024.

Key Issues

1. Whether the order dated 20.06.2024 passed by the second respondent, rejecting the petitioner's claim for reimbursement of the difference in GST, is a speaking order and legally sustainable? (Mixed question of law and fact, concerning principles of natural justice and administrative law). Petitioner's Arguments: The petitioner argued that the impugned order is a non-speaking order, passed mechanically without considering the relevant GST notifications. Specifically, the petitioner contended that the GST rate applicable to composite supply of works contract was 12% until July 18, 2022, as per Notification No. 11 of 2017 read with Notification No. 20 of 2017. The rate increased to 18% by Notification No. 3 of 2022, which was issued after the tender notification. The petitioner sought reimbursement of the 6% difference based on this change in rate. Respondents' Arguments: The respondents argued, through the impugned order, that the applicability of GST difference does not arise for tenders whose last date of receipt was after July 18, 2022. The judgment does not record any further specific arguments from the respondents.