2017 (12) TMI 515 - HC - GST

Rate of tax of GST - works contract - case of petitioners is that the contract works for which the agreements were executed prior to 01.07.2017, GST cannot be imposed and 2% VAT alone is applicable - Held that - since the petitioner s representations are pending, it is to appropriate for the respondents to respond to the same by giving them a reply. The appropriate person, who would be in a position to give reply, is that the Commissioner of Commercial Taxes shall give a reply. Because all other authorities are the department of Highways and National Highways etc., who would not be in a position to specifically address the issue pointed out by the petitioner. There will be a direction to the Commissioner of Commercial Taxes to consider the representations given by the petitioner/Association and pass orders on merits and in accordance with law - petition disposed off.

Summary

Issues:
1. Interpretation of tax liability under the Central Goods and Services Tax Act, 2017 in relation to works contract tax.
2. Representation by an association regarding the imposition of GST on works contracts executed before 01.07.2017.
3. Impleadment of the Secretary to Government, Commercial Taxes Department and the Commissioner of Commercial Taxes in the case.
4. Consideration of representations made by the petitioner/Association by the Commissioner of Commercial Taxes.
5. Direction for the Commissioner of Commercial Taxes to pass orders on merits and in accordance with the law within a specified timeline.

The judgment dealt with the interpretation of tax liability under the Central Goods and Services Tax Act, 2017 concerning works contract tax. The petitioner, an association registered under the Tamil Nadu Societies Registration Act, 1975, raised concerns over the imposition of GST on works contracts executed before 01.07.2017. The association contended that contractors should only be liable to pay 2% VAT for contracts executed prior to the implementation of GST. The petitioner sought relief through representations submitted to the respondents, emphasizing that the imposition of GST would lead to a total tax liability of 12%. The case progressed with the petitioner being directed to implead the Secretary to Government, Commercial Taxes Department, and the Commissioner of Commercial Taxes. Subsequently, the newly impleaded respondents were notified, and discussions were initiated to address the concerns raised by the petitioner.

Furthermore, the Government Advocate highlighted a Government Order reducing the GST on works contracts for Government work from 18% to 12%. The court directed the Commissioner of Commercial Taxes to consider the representations made by the petitioner and issue orders within four weeks, allowing the petitioner's representative a personal hearing. The petitioner was instructed to provide copies of the representations and the court's order to ensure compliance with the directives. Ultimately, the Writ Petition was disposed of without costs, with a specific timeline provided for the Commissioner of Commercial Taxes to address the petitioner's concerns and pass orders accordingly.