J Ambrose vs. The Director

Held

The Court held that the order dated 20.06.2024 passed by the Administrative Officer, CECRI, is a non-speaking order and is liable to be quashed. The Court found that the order did not consider the notifications cited by the petitioner and failed to address the rate of GST applicable on the date of the award of the works contract. The Court reasoned that the increase in GST rate from 12% to 18% by Notification No. 3 of 2022 Central Tax (Rate) dated 13.07.2022, which occurred after the tender notification but before the award of the contract, was a crucial aspect that the respondent failed to consider. The ratio decidendi is that administrative orders rejecting claims must be reasoned and consider all relevant legal provisions and factual circumstances. The Court quashed the impugned order and remanded the matter 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 within four weeks.

Facts

The petitioner, J. Ambrose, was awarded a works contract by CSIR - Central Electrochemical Research Institute (CECRI) through Work Order No. 10/2022 dated 02.12.2022. The petitioner paid GST at 18% on the contract work. However, CECRI sanctioned GST only at 12%. The petitioner sought reimbursement of the difference of 6% GST, amounting to Rs. 2,77,159.80, along with interest. The Administrative Officer, CECRI, by an order dated 20.06.2024, rejected the petitioner's claim, stating that the applicability of GST difference does not arise for tenders whose last date of receipt was after 18.07.2022. The petitioner challenged this order before the Madurai Bench of the Madras High Court.

Key Issues

1. Whether the order dated 20.06.2024 passed by the Administrative Officer, CECRI, rejecting the petitioner's claim for reimbursement of the GST difference is a speaking order and has considered the relevant notifications? Petitioner's arguments: The petitioner contended that the impugned order is a non-speaking order, mechanically rejecting the claim without considering the relevant notifications. The petitioner argued that the GST rate was increased from 12% to 18% by Notification No. 3 of 2022 Central Tax (Rate) dated 13.07.2022, which was after the tender notification but before the award of the contract. Therefore, the petitioner is entitled to the reimbursement of the difference. The petitioner relied on Notification No. 11 of 2017 Central Tax (Rate) dated 28.06.2017 and Notification No. 20 of 2017 Central Tax (Rate) dated 22.08.2017, which initially provided for 12% GST on composite supply of works contract to government entities. Revenue/State's arguments: The respondents argued that the applicability of GST difference does not arise for tenders whose last date of receipt was after 18.07.2022.