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2018 (10) TMI 779 - HC - GSTLevy of GST or VAT - Work Contracts executed up to 30.06.2017 - since the raising of invoices and payment for the supplies would be under the GST regime and the transaction were not accounted under the VAT - Held that - In the consequence, because of such inaction on the part of the respondent Hailakandi Municipal Board, the petitioner is now being exposed to the risk of being subjected to some coercive action by the taxing authorities. In such view of the matter and being prima facie satisfied and also considering the balance of convenience and the irreparable loss the petitioner may suffer, it is provided that in the interim, no coercive action shall be taken by the respondent authorities against the petitioner regarding the payment of GST - List this matter on 28.11.2018.
Issues:
Interpretation of GST regime in relation to contract work by Hailakandi Municipal Board; Non-deduction of tax by the respondent; Risk of coercive action by taxing authorities on the petitioner. Analysis: The case involves a dispute arising from a contract work allotted by the Hailakandi Municipal Board to the petitioner before the GST regime came into effect on 01.07.2017. The main issue is whether the respondent Municipal Board is obligated to add and deduct the relevant tax along with the bills under the new GST regime. The respondent, through a communication, clarified that for work contracts executed before 01.07.2017 but with bills raised after that date, tax deductions would be as per the provisions of the AGST Act of 2017, not the Assam VAT Act of 203. Consequently, the respondent has not been adding or deducting tax from the bills, exposing the petitioner to potential coercive action by tax authorities. The High Court, after hearing both parties, issued a notice returnable in four weeks and directed additional copies to be furnished promptly. The Court acknowledged the petitioner's risk of facing coercive action due to the respondent's inaction regarding tax deductions. To prevent immediate harm to the petitioner, the Court ordered that no coercive action be taken by tax authorities against the petitioner concerning GST payment in the interim. However, the respondent was granted the liberty to add and deduct GST as required by law. The matter was scheduled for further hearing on 28.11.2018, and the Registry was instructed to include the name of the counsel for the Finance and Taxation Department in the cause list. In conclusion, the judgment addresses the uncertainty surrounding tax deductions under the GST regime for contracts executed before its implementation. It provides temporary relief to the petitioner by restraining coercive actions while allowing the respondent to comply with GST provisions moving forward. The case highlights the importance of clarity and compliance with tax laws in contractual agreements to avoid legal complications and financial risks for the parties involved.
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