M/S.P.S.T.Engineering Construction vs. The Superintending Engineer

Facts

The petitioner, M/s.P.S.T.Engineering Construction, a construction company, entered into a works contract agreement with the respondent, the Superintending Engineer, Public Works Department, in 2020. The GST rate applicable to composite supply of works contracts for government entities was 12% until July 18, 2022, as per Notification No.11/2017 and Notification No.20/2017. However, Notification No.3/2022, effective from July 13, 2022, increased this rate to 18%. This amendment occurred while the petitioner's agreement was subsisting. The petitioner claims to have paid 18% GST but was reimbursed only at 12%, leading to a dispute over the differential amount. The petitioner submitted a representation on December 27, 2022, seeking payment of the differential GST rate.

Held

The Court directed the respondent to consider the petitioner's representation dated 27.12.2022 concerning the payment of the differential GST rate. The respondent was instructed to take into account the relevant notifications, specifically Notification No.11/2017, Notification No.20/2017, and Notification No.03/2022, when deciding the matter. The Court also suggested that a personal hearing may be granted to the petitioner if deemed necessary. The reasoning was based on the respondent's counsel acknowledging receipt of the representation and agreeing to consider it. The Court's decision is to ensure the petitioner's grievance regarding the GST rate discrepancy is addressed. The operative direction is for the respondent to dispose of the representation within six weeks from the date of receipt of the order. No specific finding was made on the merits of the GST differential claim itself, as the Court focused on directing the respondent to consider the representation.

Key Issues

1. Whether the respondent is obligated to consider the petitioner's representation dated 27.12.2022 regarding the differential GST rate, in light of the change in GST rates for works contracts from 12% to 18% during the subsistence of the contract? Petitioner's arguments: The petitioner contended that the GST rate on composite supply of works contracts for government entities was 12% until July 18, 2022, as per Notification No.11/2017 and Notification No.20/2017. They argued that Notification No.3/2022, which increased the rate to 18%, came into effect while their agreement was active. The petitioner claimed to have paid 18% GST but was only reimbursed at 12%, and therefore, the respondent should consider their representation for the differential payment, taking into account the aforementioned notifications. Respondent's arguments: The learned Additional Government Pleader for the respondent acceded to the position that the representation dated 27.12.2022 was received and would be considered.