M/S Bhagwati Enterprises Through Shri Hridesh Tyagi (Power Of Attorney Holder) vs. The State Of Madhya Pradesh

Held

The Court held that whether the nature of the construction work carried out by the petitioner under the NIT dated September 21, 2022, falls within the scope of works contract services is a question of fact. This determination needs to be addressed by the competent authority/department of GST. The Court found no reason to invoke its extraordinary constitutional jurisdiction under Article 226. Instead, it directed the concerned authority to address the petitioner's pending representation and legal notice promptly, considering the circular dated August 3, 2022, to avoid prejudice. The Court explicitly stated that it had not expressed any opinion on the merits of the case. The operative direction was to consider the representation and legal notice.

Facts

M/s Bhagwati Enterprises, a civil contractor, filed a writ petition challenging the respondent Water Resource Division's decision to pay GST at 12% for construction work under the SDMF, including management, operation, and maintenance for five years. The petitioner contended that GST on Works Contract Services was increased to 18% effective July 18, 2022, prior to the NIT dated September 21, 2022. The petitioner had made a representation to the Executive Engineer on May 4, 2023, and served a legal notice on August 5, 2023, without resolution.

Key Issues

1. Whether the construction work carried out by the petitioner under the NIT dated September 21, 2022, falls within the scope of works contract services attracting GST at 18% as per the circular dated August 3, 2022, issued by the Department of Revenue (Tax Research Unit), Ministry of Finance, Government of India. Petitioner's contention: The petitioner argued that GST on Works Contract Services was increased to 18% from July 18, 2022, and this rate should apply to their contract, which was based on an NIT floated after this increase. They relied on the circular dated August 3, 2022. Revenue/State's contention: The judgment does not record any specific arguments from the respondents. However, the Court noted that the nature of the construction work and its classification under works contract services is a question of fact to be determined by the competent authority.