2018 (10) TMI 1239 - HC - GST

Implication of GST on the contracts between petitioners and Railways entered into before 1.7.017 - works contract services done by the petitioner for the work orders entered into prior to introduction of GST and works completed after implementation of GST - the petitioner, without submitting any representation to the respondents, has straight away approached this Court and seeks for a direction - Circular dated 27. 10. 2017. Held that - The said contention is not acceptable for the reason that the Circular issued by the Railway Board dated 27. 10. 2017 states that for dealing with the impact of GST in individual contracts, a supplementary contract has to be entered into. Therefore, to study the impact of GST in individual contracts, occasion may arise for the Railway Administration to consult the 5th respondent and in such an event, the 5th respondent would be in a position to issue necessary clarification or guidelines to the Railway Administration. Since the petitioner has not given a representation to the authorities, the Court directs him to do so within a time frame - petition disposed off.

Summary

Issues:
Petitioner seeking mandamus to direct respondents to implement instructions on works contract services pre and post-GST implementation. Interpretation of Circular on supplementary agreement for GST impact in individual contracts. Entertaining petitioner's plea without prior representation to respondents. Fifth respondent's role in GST impact clarification.

Analysis:
The petitioner, a registered contractor with Southern Railways, sought a writ of mandamus to enforce instructions by the Second Respondent regarding works contract services pre and post-GST implementation. The petitioner highlighted a Circular requiring a supplementary agreement for dealing with GST impact in individual contracts, emphasizing the need for balance payment by the contractor due to the disparity between GST percentages paid and reimbursed. The Court noted the petitioner's direct approach without prior representation to the respondents, which hindered the consideration of the larger issue beyond individual contractors.

The Court acknowledged the Standing Counsel's objection to entertaining the petitioner's plea due to the lack of prior representation to the respondents. Emphasizing the necessity of exhausting administrative remedies before seeking judicial intervention, the Court directed the petitioner to submit a representation to the fourth respondent within two weeks, along with a copy of the order. The fourth respondent was instructed to consider the representation, seek clarification from the fifth respondent if needed, and make decisions based on merit and law within two weeks of receiving clarification.

Regarding the fifth respondent's involvement, the Court rejected the argument that the fifth respondent was neither a proper nor necessary party to the writ petition. Citing the Circular's requirement for a supplementary contract to address GST impact in individual contracts, the Court highlighted the potential need for the Railway Administration to consult the fifth respondent for necessary clarifications or guidelines. Thus, the Court emphasized the fifth respondent's potential role in providing insights on the GST impact in individual contracts, underscoring the importance of collaboration for effective decision-making in such matters.