9911796707
TMI Blog2024 (6) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... tted bid value which includes GST, the contractor cannot claim additional GST tax which is tantamount to double payment of tax and more over after finalizing and approving the tender all the taxes or GST cannot be excluded from the tender condition which is not permissible and tantamount to favouring one bidder over the other bidders and against the spirit of Tamil Nadu Tender in Transparency Act, 2000. Only to reduce the tax burden, the government has issued G.O.Ms.No.264 dated 05.09.2017, which stated that GST council in its meeting held on 20.08.2017 and 19.09.2017, deliberated to issue and GST on works contract for government work is being reduced to 12% in order to balance the taxes on works contract in the pre GST and post GST regime and therefore, the petitioner is no way affected. As per the report, the petitioner has to execute a supplemental agreement to the tune of Rs. 175.32 crores as against the original value of Rs. 179.69 crores. Accordingly, as per the supplemental agreement which has been reduced to Rs. 4.37 crores by the proceeding dated 07.06.2019 - Further the effective date of GST was 01.07.2017. The date publication of tender was on 22.06.2017. As per the agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the respondent for the execution of the works except GST which will have to be borne by the respondent. Therefore, GST stood expressly excluded by the parties from the total consideration payable and expressly agreed that the payment of GST will be borne by the respondent. 3. Thereafter, the petitioner vide E-mail dated 21.04.2018 had furnished the proof of payment for GST paid for Rs. 10,79,12,794/- for reimbursement of GST amount paid during the course of execution of the agreement. The respondent had paid GST at 12% extra for Rs. 10,79,12,794/-. However, the respondent failed to pay additional GST for the subsequent bills. Therefore, the petitioner submitted representation to the respondent for the payment of GST amount. Since the same was not considered, the petitioner approached this Court by way of the present writ petition. 4. The learned counsel appearing for the petitioner submitted that the respondent by a letter dated 18.07.2018, stated that GST against the works of the said project may be given only after approval of a Revised Financial Statement (hereinafter called as RFS ). By way of reply, the petitioner pointed out that they were acting in accordance with the ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause. 6. Heard the learned counsel appearing on either side and perused the materials placed before this Court. 7. As per the tender document in condition No.31.0, bid quoted shall be for finished work in site and inclusive of all incidental and contingent charges. All taxes such as GST, seigniorage, cess, royalties, service tax etc., in respect of materials to be used on the work must be borne by the contractor. The quoted rate shall be inclusive of all taxes, duties and levies including income tax, sales tax, service tax, local taxes, toll charges octroy, all royalties, patent rights, other incidental charges and any other taxes which may arise/increase at a later date during currency of the agreement or for any other cause, shall be included in the rates wherever applicable and shall be paid by the contractor. No claim whatsoever in this regard shall be entertained by the employer at a later date. 8. Accordingly, the contractor himself admitted that all the taxes should be paid by him only because the agreement rates are inclusive of all taxes including GST. After agreements, the site was handed over to the petitioner. Further as per the financial bid clause No.6.4, the rates an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or estimating the value of subsumed tax. If, after negotiation, the contracted value is less than the bid value, the tax quoted shall be proportionately reduced to arrive at estimate of the value of subsumed tax. For instance, if the bid value was Rs. 50 Lakh and the breakup of tax is Central Excise Duty of Rs. 1 Lakh and VAT or CGST of Rs. 1 Lakh, the corresponding subsumed tax as per his breakup of taxes is Rs. 2 lakh and after negotiation, contracted value was reduced to Rs. 48 Lakh, The subsumed tax shall be taken as Rs. 2 Lakh x 48/50 = 1.92 Lakh. b) In case, the breakup of taxes was not obtained or furnished in the bid document, the supplier may be asked to furnish breakup of the taxes within the contracted amount, giving details and explanations and based on this estimate of total subsumed tax shall be arrived. For instance, if for the contracted amount of Rs. 48 Lakh in the example above, the supplier states that the Central Excise Duty is Rs. 1 Lakh and VAT or CGST is Rs. 1 Lakh, after checking the reasonability of his claim, the subsumed tax may be arrived at Rs. 2 Lakh. c) The estimate of subsumed tax should also be worked out independently from the departmental estimate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and subsequent amendment in G.O.Ms.No.296 dated 09.10.2017 are biding on both the parties and applicable to this case. Further the petitioner has not chosen to produce any documents to show that he has paid GST. The petitioner also failed to produce document that he had claimed input tax credit. 14. In view of the above discussions, the issues involved in this writ petition are mixed question of facts and law and it cannot be decided in the writ petition that too under Article 226 of the Constitution of India. It has to be dealt with in accordance with law. Further there is an arbitration clause is available in the agreement and it is relevant to extract as follows :- ARBITRATION CLAUSE/SETTLEMENT OF DISPUTES: If any dispute of difference of any kind whatsoever arises between the TNSCB and the Contractor in connection with, or arising out of the Contract, whether during the progress of the works or after their completion and whether before or after the termination, abandonment or breach of the Contract, it shall in the first place, be referred to and settled by the Engineer-in-Charge who shall, within a period of thirty days after being requested by the Contractor to do so, give w ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
