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2024 (6) TMI 110 - HC - GSTDeduction of tax at source in respect of work contract and supplies - Entitlement to Additional Tax Reimbursement under Section 64A of the Sale of Goods Act 1930 - HELD THAT - There are two pre-conditions which are required to be fulfilled for the purpose of invoking the provision of Section 64A of the Act of 1930. First that there was no contract to the contrary by which either the seller had precluded himself from claiming such enhanced duty i.e. the contract having negative or limited the seller s right to prefer such a claim or at least silent as regards what was to happen in the event of a duty being increased. The second pre-condition is that the change in the rate of duty was affected after the date of the contract. This very provision of Section 64 A of the Act of 1930 was relied upon by the Supreme Court in MAFATLAL INDUSTRIES LTD. VERSUS UNION OF INDIA 1996 (12) TMI 50 - SUPREME COURT in the context of examining the application of the principle of unjust enrichment and it was held that in view of the ability of the seller to recover the increase in the difference of excise or customs it would be legitimate for the Court to presume until contrary is established that a duty of excise or customs have been passed on by the seller to the buyer. In the instant case it may not be a case of reduction in rate of tax on any supply of goods or services but it may be a case where there might be benefit of input tax credit which have been availed by the petitioners taking into account that in the writ petitions the works have been completed after 01.07.2017. Under such circumstances these aspects of the matters also are required to be considered by the authority concerned. The Circular No. 3/2017-GST dated 24.08.2017 is in accordance with the provisions of Section 12 and Section 13 read with Clause 6 (a) of Schedule II of the Act of 2017 and CGST - The petitioners would be liable to pay GST @ 6% under the Act of 2017 and 6% under the CGST in respect to those invoices raised on or after 01.07.2017 and in respect to which received payments and/or receivable on or after 01.07.2017. Accordingly the directions so issued in some of the writ petitions directing the petitioners to deposit GST @ 12% in respect to invoices raised on or after 01.07.2017 are in accordance with law - This Court is not in a position to decide as to whether the petitioners are entitled to the benefit of Section 64 A of the Act of 1930 in as much as the materials placed before this Court are insufficient to decide the various aspects as detailed out at paragraph No.55 (d) of the instant judgment. The writ petition is disposed off.
Issues Involved:
1. Whether tax deduction should be under the Assam Value Added Tax Act, 2003 or the Assam Goods and Service Tax Act, 2017. 2. Whether petitioners are liable for GST on invoices and payments post-2017. 3. If liable for GST, whether petitioners can claim additional tax from respondent authorities. Summary of Judgment: Issue 1: Tax Deduction under the Act of 2003 or Act of 2017 The High Court of Gauhati examined whether tax deductions for contracts awarded before the implementation of the Assam Goods and Service Tax Act, 2017 (the Act of 2017) but with payments made post-implementation should be under the Assam Value Added Tax Act, 2003 (the Act of 2003) or the Act of 2017. The Court upheld Circular No. 3/2017-GST, stating it is in accordance with Sections 12 and 13 read with Clause 6(a) of Schedule II of the Act of 2017 and CGST. The Court ruled that if invoices were raised and payments received post-01.07.2017, the tax liability arises under the Act of 2017 and CGST. Issue 2: Liability for GST on Post-2017 Invoices and Payments The Court determined that petitioners are liable to pay GST at 6% under the Act of 2017 and 6% under CGST for invoices raised and payments received on or after 01.07.2017. The Court noted that the deductions made by respondents in respect of these invoices are in accordance with the law. The interim orders protecting petitioners from paying GST were vacated. Issue 3: Claiming Additional Tax from Respondent Authorities The Court examined whether petitioners could claim additional tax due to the increased tax rate under GST. The Court referred to Section 64A of the Sale of Goods Act, 1930, which allows for price adjustment due to changes in tax rates unless the contract states otherwise. However, the Court found insufficient materials to decide on this issue and granted liberty to petitioners to submit representations to respondent authorities for reimbursement claims. The authorities are to consider these claims within six months, taking into account the Court's observations. Conclusion: 1. Circular No. 3/2017-GST is valid and in accordance with the law. 2. Petitioners must pay GST on invoices raised and payments received post-01.07.2017. 3. Petitioners may submit representations for reimbursement of additional tax, which authorities must consider within six months.
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