T Selvam vs. The Secretary TO Government

Held

The Court disposed of the writ petition at the admission stage, dispensing with the need for counter-affidavits from the respondents, as no adverse orders were proposed against them at that juncture. The Court directed respondents 4 and 5 to consider the petitioner's representation positively and expeditiously, preferably within four weeks from the order's receipt, to prevent inconvenience to the petitioner from respondents 2 and 3. The Court also permitted respondents 2 and 3 to proceed with issuing DRC 01. However, they were instructed to await a period of six weeks for respondents 4 and 5 to dispose of the petitioner's representation before passing any orders. This was based on the reasoning that the petitioner is a service provider and GST, being an indirect tax, is ultimately borne by the recipient (respondents 4 and 5). The Court did not expressly leave any issue undecided, but the ultimate outcome of the representation and the subsequent adjudication by respondents 2 and 3 were contingent on further action.

Facts

The petitioner, a Government contractor, filed a writ petition seeking a mandamus to direct respondents 4 and 5 (Executive Officer, Keeranur Town Panchayat and Executive Engineer, Public Works Department) to implement Government Order G.O.Ms.No.114 dated 22.07.2022 and pay GST at the enhanced rate of 18% on bills claimed after 18.07.2022. The petitioner stated that the GST rate on works contract services increased to 18% effective from 14.07.2022, as per Notification No.03/2022-CT (R) dated 13.07.2022 and the aforementioned G.O. The petitioner was concerned that respondents 2 and 3 (State Tax Officers) were insisting on the petitioner discharging the enhanced tax and had issued a notice in DRC 01A on 18.03.2024, potentially leaving the petitioner without remedy if they proceeded to adjudicate without issuing DRC 01 first.

Key Issues

1. Whether respondents 4 and 5 should be directed to pay GST at the rate of 18% on bills claimed on and after 18.07.2022 to the petitioner, in compliance with G.O.Ms.No.114 dated 22.07.2022 and Notification No.03/2022-CT (R) dated 13.07.2022? Petitioner's arguments: The petitioner contended that the GST rate on works contract services was increased to 18% from 14.07.2022. They sought a direction for respondents 4 and 5 to pay this enhanced rate on bills claimed after 18.07.2022. The petitioner also expressed concern that respondents 2 and 3 might proceed with adjudication based on a DRC 01A notice without following the proper procedure (DRC 01), which could prejudice their remedies. Revenue/State's arguments: The judgment records no specific arguments from respondents 1 to 3 (State Tax Officers) or respondents 4 and 5 (recipient departments) regarding the petitioner's claim for enhanced GST payment. The court disposed of the writ petition at the admission stage, dispensing with counter-affidavits as no adverse orders were proposed against the respondents at that stage.