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TMI Blog2024 (12) TMI 826X X X X Extracts X X X X X X X X Extracts X X X X ..... State equivalent to the work executed in respective states. As such the tax liability for the work executed in Telangana shall be payable in Telangana. It is pertinent to note that petitioner JV failed to place on record inter se agreement entered between L T and PES with regard to works allotted and executed by each partner. It is contended that JV is a pass through entity and in fact the project works were executed by the partners of JV independently. Also further contended that partners of JV raises bills in favour of the JV and which in turn raises bills in favour of 4th respondent by taking input credit. Since no material is placed on record with regard to proportion of work executed by each partner of JV independently, it is not possible for this court to determine the proportion of work executed in both States and tax liability thereof. It is contended by the petitioner that tax liability has been discharged independently for the works executed in the State of Maharashtra, however, the petitioner failed to produce any material on record evidencing discharge of tax liability in the State of Maharashtra. As far as the issue of refund for the period October, 2018 to March, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State of Telangana, but the execution of contract is spread between the States of Telangana and also Maharashtra; that there was a specific Inter-Board Agreement dated 23.08.2016 signed by both Telangana and Maharashtra States through Hon ble Chief Ministers. For this purpose a special utility vehicle called as Kaleshwaram Irrigation Project Corporation Limited (hereinafter referred to as KIPCL ) i.e., respondent no. 4 was formed. 4.1. The work executed by the petitioner is a works contract as defined in Section 2 (119) of the Central Goods and Service Tax Act, 2017 (CGST Act) as well as State Goods and Service Tax Act, 2017 (SGST Act); that petitioner being a separate legal entity has obtained GST registration under both the Acts in the State of Maharashtra and the State of Telangana; that since the project is spread across two States, the liability has to be discharged to the extent of work executed in both states and as such obtained registration. It is averred that petitioner is a pass-through entity and the actual execution of works contract is done by the partners viz., L T Ltd., and PES Engineers Ltd., who are independent registered dealers both in the State of Telangana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 019. Though the petitioner filed reply claiming that the demand is not sustainable since the TDS deducted by 4th respondent was to be deposited proportionate to the State of Telangana and State of Maharashtra based on actual value of work executed in two states. Petitioner also placed reliance on a letter dated 13.01.2020 of the Executive Engineer, Irrigation and Command Area Development of Medigadda that TDS under GST Act has been recovered by the contractee on total value of the work done in the territories of Maharashtra and Telangana, but has been deposited entirely in State of Telangana. In fact, as the contractee is not having its existence in the territory of Maharashtra, they could not have recovered the TDS on the value of work done and billed in the territory of Maharashtra. It is further averred that Petitioner has filed an appeal against the Refund Rejection Order, dated 30.01.2020 before the 6th respondent and requested the authority to await the decision of the 6th respondent. 4.5. By the additional reply, dated 06.03.2020, petitioner submitted that it is entitled for refund of the excess TDS lying in the Electronic Cash Ledger, since it represents the TDS correspondi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be declared as illegal. 4.8. However, the 6th respondent while reconciling the turnovers of taxes between those determined by the 1st respondent and furnished by the petitioner, has sought apportion the TDS amount partly to the State of Telangana, based on the proportion of the output tax reported in Telangana and likewise for the State of Maharashtra. Accordingly, a sum of Rs. 4,55,65,816/- was calculated and declared to be eligible as refund for the State of Telangana; that in the said process, the refund has been rejected for Rs. 5,56,88,300/-. Hence, the writ petition. 5. The 6th respondent filed counter in W.P. No. 19376 of 2020 and contended that if the contention of the petitioner that they executed the work of construction of barrage is to be accepted the deduction of tax as per the provisions of Section 51 of CGST Act by the contractee was erroneous. That Section 51 (1) states that no deduction shall be made if the location of the supplier and place of supply is in a state or union territory, which is different from State or (as the case may be) union territory of registration of the recipient. Despite the said proviso, the 4th respondent deducted the tax. The writ pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner. Though petitioner claims to have independently discharged the liability in the State of Maharashtra, it is not for the 6th respondent to examine the veracity of the claim; that there was no liability to discharge independently by the petitioner in the State of Maharashtra. 5.4. It is averred that 6th respondent adopted the proportionate method to grant refund because the petitioner did not furnish the details of quantum of TDS relating to Telangana work, out of TDS amount. The 6th respondent in its order clearly mentioned that the refund of excess TDS relating to Maharashtra works should be claimed from Maharashtra State. That there was no arbitrariness in the order passed by 6th respondent; that as far as the refund of TDS amounts is concerned, it is a fait accompli because the entire TDS amount was adjusted against the additional demand raised for the reasons, adverted to in DRC-7 proceedings, including and limited to the place of supply provisions, intent of contractee and the nature of the contract as assessed by the 1st respondent and finally prayed to dismiss the writ petitions. 6. Heard Mr. S. Dwarakanath learned senior counsel for the petitioner and Mr. M. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment of Telangana does not have any existence in the State of Maharashtra, it could not have deducted any TDS. That as admitted by the petitioner and 4th respondent, the total cost of the project was borne by the Telangana Government and there was no bifurcation of payment in respect to the work done in Maharashtra or Telangana territories. That since the place of supply entirely falls under the Telangana State as per the Act, the petitioner, who got registered in Telangana State, should have shown the full turnover in its GSTR-3B returns, but it failed to do so. 10. It is contended that the petitioner if at all paid any tax in Maharashtra as claimed, it can always seek a refund, but cannot deny the taxes due in the State of Telangana as per the scheme of CGST/SGST and IGST Act. That the aggrieved person can always file an appeal against any decision or order by an adjudicating authority. Further, the petitioner ought to have availed the remedy of appeal available under the Act. That without availing such remedy, the writ petition is not maintainable and finally, prayed to dismiss the writ petition. Consideration : 11. The issues that fall for consideration are as to, (i) whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking input credit. 15. Since no material is placed on record with regard to proportion of work executed by each partner of JV independently, it is not possible for this court to determine the proportion of work executed in both States and tax liability thereof. It is contended by the petitioner that tax liability has been discharged independently for the works executed in the State of Maharashtra, however, the petitioner failed to produce any material on record evidencing discharge of tax liability in the State of Maharashtra. 16. As far as the issue of refund for the period October, 2018 to March, 2019 and April, 2019 to July, 2019 is concerned, it is imperative for us to determine the place of supply of services. As Section 12 (3) of IGST Act is applicable to the present case at hand, the place of supply shall be both the States and the nature of supply is intra-state in proportionate to the value of services rendered or determined in respective States. 17. The petitioners had meanwhile filed two writ petitions i.e., W.P.Nos.6271 and 6299 of 2020 in respect of somewhat similar issue and the said two writ petitions have been clubbed and were heard together and are disposed of by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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