M/S.T.S. Lourdhsamy And Sons vs. Public Works Department

Facts

The petitioner, M/s.T.S.Tourdhsamy & Sons, filed a writ petition challenging a letter dated 27.10.2020 from the Executive Engineer, Public Works Department (1st respondent). The petitioner sought reimbursement of Goods and Service Tax (GST) paid for a contract to construct a check dam across the Vaigai River. The tender was accepted on 21.07.2017, and a work order was issued on 24.08.2017 for Rs.9,62,14,330/-. The agreement was also entered into on 24.08.2017. GST was introduced on 01.07.2017, subsuming earlier indirect taxes. The petitioner contended that the agreement did not contemplate the effect of GST, and sought reimbursement based on methodologies in G.O.Ms.No.296 of 2017. The respondents required more particulars and documents to consider the claim.

Held

The Court directed the petitioner to make a fresh representation to the third respondent within four weeks, seeking reimbursement of GST paid, and to submit all relevant GST returns. The third respondent was directed to consider this representation in line with G.O.(Ms)No.264 dated 15.09.2017 and G.O.(Ms)No.296 dated 09.10.2017. The Court also emphasized that the petitioner's specific plea regarding the incorrect inclusion under 'Subsumed Tax Amount', as raised in their earlier representation dated 20.10.2020, must be specifically dealt with by the third respondent. The petitioner was instructed to annex the earlier representation with the fresh one. The third respondent was mandated to take a decision on the reimbursement claim within 12 weeks of receiving the fresh representation. The Court did not decide the merits of the GST reimbursement claim itself but provided a procedural path for its consideration.

Key Issues

1. Whether the petitioner is entitled to reimbursement of GST paid, considering the agreement was entered into after the introduction of GST but allegedly did not contemplate its effect? (Mixed question of law and fact, concerning contract interpretation and tax liability). Petitioner's arguments: The petitioner argued that the agreement dated 24.08.2017 did not contemplate the impact of GST, which was introduced on 01.07.2017. They sought to benefit from Government Orders G.O.(Ms)No.264 dated 15.09.2017 and G.O.(Ms)No.296 dated 09.10.2017, which provided guidelines for evaluating net tax liability changes for contractors. The petitioner also contended that a sum of Rs.82,75,323/- included under 'Subsumed Tax Amount' was incorrect, as service tax should be zero for works contracts, and central excise duty was not applicable as materials were purchased from second-sale suppliers without Excise Duty bills. Service tax had also been exempted for this project prior to GST. Respondents' arguments: The respondents, represented by the Additional Advocate General, submitted that they required more particulars and documents from the petitioner to consider the reimbursement claim. They indicated that if the petitioner submitted a representation to the third respondent along with all GST returns, it would be dealt with in line with the Government Orders.