Murugesan. M vs. The Secretary TO Government (Rural Development)

Held

The Court disposed of the writ petitions by directing the respondents to expedite the reimbursement of tax already paid by the petitioners and to pay the differential tax directly to the accounts of the concerned Project Directors (respondents 8 & 9 in WP No. 9095 of 2023 and respondents 8 & 9 in WP No. 13587 of 2023). The Court further directed respondents 8 & 9 not to take any coercive steps against the petitioners, as the tax was to be paid to the government and the amount to be paid was also by the government. The 6th respondent (Commissioner of GST and General Excise) was directed to dispose of the petitioner's representation dated 21.04.2023 and take steps for getting the amounts due from the Government expeditiously, preferably within six months from the date of receipt of the order. The Court explicitly stated that the writ petitions were disposed of with these directions, referencing the operative portion of the order in W.P.No.22771 of 2023.

Facts

The petitioners, M. Murugesan and PL.R. & Co., filed writ petitions seeking a Mandamus to direct various government departments and their subordinates to implement Government Order G.O.Ms.No.114, dated 22.07.2022, and to pay service tax at the rate of 18% on bills claimed on or after 18.07.2022. The petitioners are contractors who had undertaken work for government departments. The dispute arises from an increase in GST rate from 12% to 18% effective from 18.07.2022, which the petitioners claim should be borne by the government as per the G.O. The government departments, represented by various Secretaries and Commissioners, were respondents. The procedural history indicates that these writ petitions were disposed of based on a previous order of the same High Court in a similar matter.

Key Issues

1. Whether the respondents are obligated to implement Government Order G.O.Ms.No.114, dated 22.07.2022, and pay the differential GST at 18% on bills claimed on or after 18.07.2022 to the petitioners, as per Article 226 of the Constitution of India. Petitioner's Argument: The petitioners contended that the Government Order mandates the payment of the increased GST rate by the government departments. They sought a direction to implement this G.O. and pay the differential tax forthwith. Revenue/State's Argument: The respondents, through their counsel, confirmed that the issue was covered by a previous decision of the High Court in Vediappan Vs. The Secretary to Government, Commercial Taxes and Registration Department and others. The counter affidavit in the cited case indicated that the department had sought approval and funds for making payment of the differential GST at 6%. The respondents undertook to settle the differential GST upon receipt of necessary orders and funds from the competent authority.