2022 (3) TMI 260 - HC - GST

Liability of GST on tender bid and other successful bidders - it is submitted that instead of paying the tax by themselves, the respondents were demanding it from the petitioner, which is contrary to the provisions of the respective Goods and Services Tax Act, 2017 - HELD THAT - The tender conditions stipulate that applicable tax has to be paid by the petitioner. Whether the respondents 3 and 4 were exempted from payment of tax in terms of Notification No.12/17 and Central Tax (Rate) dated 28.06.2017 or not cannot be decided in a writ proceeding. Though prima facie it appears that the demand of service tax from the petitioner was correct, it would however require a proper adjudication by the authorities under the respective GST enactments. As a matter of fact, if the petitioner is of the view that the petitioner was not liable to pay tax, it is open for the petitioner to file appropriate application for refund of the incidence of tax paid under Section 54 of the respective enactments. Having participated in the tender, it is not open for the petitioner to state that the petitioner cannot be asked to pay tax, if indeed GST was payable by the 3rd and 4th respondent. In State of Punjab and another Vs. Devan Modern Brewaries Limited and another 2003 (11) TMI 558 - SUPREME COURT , the Hon'ble Supreme Court has further held that having participated in the tender, it is not open for the bidder to say that the condition of the tender cannot be imposed. The above ratio will apply to the facts of the present case. Therefore, there is no merits in the present writ petition. Only remedy available to the petitioner is to approach the authority concerned under Section 54 of the respective GST enactments for refund of the GST collected from the petitioner in accordance with law. The writ petition is dismissed with liberty to the petitioner to approach the appropriate authorities under the respective GST enactments to workout the remedy.

Summary

Issues:
Challenge to tender cum auction notice demanding GST from petitioner on tender bid and successful bidders.

Analysis:
The petitioner challenged a tender cum auction notice demanding GST from them on the tender bid and successful bidders. The petitioner participated in a tender for a temple festival and was the successful bidder for selling a specific product. The petitioner argued that the respondents were demanding GST from them, which was contrary to the provisions of the Central Goods and Services Tax Act, 2017. The respondents, on the other hand, contended that the supply made to the petitioner was not exempted from tax and that they were passing on the tax incidence to the petitioner. The respondents claimed that the petitioner had voluntarily paid the GST as per the tender conditions. They also argued that the temple activity was not charitable, therefore liable for GST. The respondents presented a printout regarding GST exemptions for charitable activities.

The court considered the arguments from both sides and noted that the tender conditions required the petitioner to pay applicable tax. The court observed that the question of whether the respondents were exempt from tax could not be decided in a writ proceeding. It was mentioned that if the petitioner believed they were not liable to pay tax, they could seek a refund under Section 54 of the GST enactments. Referring to a Supreme Court case, the court emphasized that once a bidder participated in a tender, they could not later claim exemption from the tender conditions. The court concluded that the petitioner could seek remedies under the GST enactments but dismissed the writ petition, allowing the petitioner to approach the appropriate authorities for relief.

In conclusion, the court dismissed the writ petition challenging the GST demand in the tender cum auction notice, advising the petitioner to seek remedies under the GST enactments. The court highlighted that once a bidder participates in a tender, they cannot later claim exemption from the conditions. The judgment emphasized the need for proper adjudication by the GST authorities and suggested the petitioner approach the authorities for refund if they believed they were not liable to pay tax.