2025 (1) TMI 45 - HC - GST

Deductions made from the petitioner's 2nd and 3rd running bills under the Central Goods and Services Tax Act, 2017 (CGST Act) and the Assam Goods and Services Tax Act, 2017 (SGST Act) - validity of Circular No. 3/2017-GST - HELD THAT - This Court finds that the present writ petition has become infructuous, inasmuch as, there was no infirmity with the application of the CGST and SGST by the State respondents, while making deductions against the 2nd and 3rd running bills of the petitioner. It is needless to add that if the petitioner is of the view that he is entitled to some concession as per law, there is no bar for the petitioner to submit a representation to that effect. The writ petition is accordingly dismissed as infructuous.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment are:

• Whether the deductions made from the petitioner's 2nd and 3rd running bills under the Central Goods and Services Tax Act, 2017 (CGST Act) and the Assam Goods and Services Tax Act, 2017 (SGST Act) were justified, given that the Notice Inviting Tender (NIT) was issued under the Value Added Tax Act, 2003.
• Whether the petitioner is entitled to any relief or concession under Section 64A of the Sales of Goods Act, 1930, following the precedent set by a similar case, WP(C) No.4201/2020.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Justification of Deductions under CGST and SGST Acts

• Relevant Legal Framework and Precedents: The legal framework involves the transition from the Value Added Tax Act, 2003 to the CGST and SGST Acts, 2017. The precedent case WP(C) No.4201/2020 established that for contracts partially executed before the GST regime, deductions should be as per the 2003 Act, while those executed and billed after should adhere to the GST framework.
• Court's Interpretation and Reasoning: The court relied on the precedent set in WP(C) No.4201/2020, which clarified the applicability of the GST Acts to contracts executed after the GST regime began. The court found no infirmity in the deductions made under the CGST and SGST Acts.
• Key Evidence and Findings: The petitioner argued that the deductions should have been under the 2003 Act, as the NIT was issued during its validity. However, the court found that since the 2nd and 3rd bills were submitted post-GST implementation, the deductions were correctly made under the new Acts.
• Application of Law to Facts: The court applied the legal principles from the precedent case to the facts of this case, concluding that the deductions made under the GST regime were appropriate.
• Treatment of Competing Arguments: The petitioner's argument was rendered moot by the precedent case, which had already addressed the issue. The respondent's argument that the deductions were correctly applied under the GST Acts was upheld.
• Conclusions: The court concluded that the deductions made under the CGST and SGST Acts were justified and that the petition had become infructuous.

Issue 2: Entitlement to Relief under Section 64A of the Sales of Goods Act, 1930

• Relevant Legal Framework and Precedents: Section 64A of the Sales of Goods Act, 1930 deals with the adjustments in the contract price due to changes in tax rates. The petitioner sought to explore this provision for potential relief.
• Court's Interpretation and Reasoning: The court did not provide a detailed analysis on this issue, as it was not directly relevant to the resolution of the current petition. However, it acknowledged the petitioner's right to submit a representation for relief under this section.
• Key Evidence and Findings: The petitioner's counsel requested the opportunity to submit a representation, which the court permitted, indicating that the petitioner could seek relief through administrative channels.
• Application of Law to Facts: The court did not apply Section 64A directly but allowed the petitioner to pursue this avenue separately.
• Treatment of Competing Arguments: The court did not engage in a detailed discussion of competing arguments on this issue, as it was not central to the petition's dismissal.
• Conclusions: The court dismissed the petition as infructuous but allowed the petitioner to make a representation under Section 64A if deemed appropriate.

3. SIGNIFICANT HOLDINGS

• Preserve Verbatim Quotes of Crucial Legal Reasoning: "This Court finds that the present writ petition has become infructuous, inasmuch as, there was no infirmity with the application of the CGST and SGST by the State respondents, while making deductions against the 2nd and 3rd running bills of the petitioner."
• Core Principles Established: The judgment reaffirms the principle that for contracts executed and billed after the implementation of the GST regime, deductions should be made under the CGST and SGST Acts. The precedent set in WP(C) No.4201/2020 is upheld.
• Final Determinations on Each Issue: The court determined that the deductions under the CGST and SGST Acts were justified, rendering the petition infructuous. It allowed the petitioner the option to seek relief under Section 64A of the Sales of Goods Act, 1930 through a representation.