2018 (3) TMI 1016 - HC - GST

Consideration of representations submitted by the petitioner - Levy of GST - Works Contract, on which VAT was imposed previously - the petitioner/association made representations on 05.07.2017 10.07.2017, 11.07.2017 and 11.09.2017 to the respondents stating 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 appropriate for the respondent 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 representation given by the petitioner/ association and pass orders on merits and in accordance with law, within a period of four weeks from the date of receipt of a copy of this order.

Summary

Issues:
1. Interpretation of tax liability post enactment of Central Goods and Services Tax Act, 2017.
2. Representation by the petitioner regarding tax imposition and non-consideration.
3. Impleadment of Secretary to Government, Commercial Taxes Department, and Commissioner of Commercial Taxes.
4. Consideration of representations and passing orders by the Commissioner of Commercial Taxes.

Interpretation of tax liability post enactment of Central Goods and Services Tax Act, 2017:
The petitioner, an association for the welfare of Road Contractors, raised concerns post the enactment of the Central Goods and Services Tax Act, 2017. They highlighted issues arising from the notification by the Central Government levying 6% tax on Works Contract. The State Government's empowerment to levy additional tax led to a total tax liability of 12% towards works contract. The petitioner made representations emphasizing that contracts executed before 01.07.2017 should only be subject to 2% VAT, not GST. The Court acknowledged the complexities and directed the Commissioner of Commercial Taxes to consider the representations and pass orders within four weeks.

Representation by the petitioner regarding tax imposition and non-consideration:
The petitioner association submitted multiple representations to the respondents, stating their stance on tax liability post-GST implementation. They emphasized that if compelled to pay above 2%, the GST should be remitted by the respondents. The representations were made on various dates in 2017, highlighting the contractual obligations and the need for clarity on tax liabilities. Despite the submissions, no orders were passed, leading to the petitioner seeking legal intervention for resolution.

Impleadment of Secretary to Government, Commercial Taxes Department, and Commissioner of Commercial Taxes:
During the legal proceedings, the petitioner was directed to implead the Secretary to Government, Commercial Taxes Department, and the Commissioner of Commercial Taxes. The Government Advocate for Taxes accepted notices for the newly impleaded respondents. The Court emphasized the importance of involving the Commissioner of Commercial Taxes in addressing the petitioner's concerns due to the technical nature of the issue and the need for a specialized response.

Consideration of representations and passing orders by the Commissioner of Commercial Taxes:
In light of the representations and the stand taken by the parties, the Court directed the Commissioner of Commercial Taxes to review the petitioner's submissions and issue orders based on merit and legal provisions within four weeks. The Court also mandated that the petitioner's authorized representative be given a personal hearing by the Commissioner. The petitioner was instructed to provide copies of the representations and the Court's order to ensure effective compliance with the directions provided.