Back
THE GAUHATI HIGH COURT, (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
DEVASHIS BARUAH, J.
HCC-CPL (JV), A Joint Venture Group, Rep. By The Regional Head (NE) Sri Shaik Moulali, S/o. John Saheb – Petitioner
Versus
The Union Of India, Rep. By The Secretary, Ministry Of Railways And Ors. – Respondents
WP(C) No.2683 Of 2021
Decided On : 26-06-2023
Central Goods and Service Tax Act, 2017 - Section 171(1), 2 (62), (63), (67), (82), (83), 16, 54, 49 (6) - Price variation on steel - Entitled to reimbursement of GST - Whether Petitioner would be entitled to reimbursement of GST on differential amount of price variation on steel – Petitioner had paid output tax through its electronic credit ledger by using its input tax credit, same shall not be a ground to deny entitlement of Petitioner to reimbursement of GST - Para 44.
Finding of the Court:
When supplier pays output tax from its electronic credit ledger, it would amount that supplier had paid output tax which is reimbursable - Amount paid from electronic credit ledger has to be taken into consideration while computing PVC Claim - Therefore, if Court accepts contention of Respondent Railways, it would result in supplier getting reimbursed an amount which would be less than purchase price during period under consideration - Petitioner would be entitled to his PVC claim in terms with contract and GST paid by Petitioner from its electronic credit ledger has to be taken into consideration while computing PVC Claims of Petitioner - Petitioner would be well adviced therefore to take steps in terms with JPO for making its PVC claims, if not already done and Respondent Railways shall pay PVC claims on basis of contract - It is yet again reiterated that on ground that Petitioner had paid output tax through its electronic credit ledger by using its input tax credit, same shall not be a ground to deny entitlement of Petitioner to reimbursement of GST.
Result: Petition allowed.
JUDGMENT :
Heard Mr. D.Mazumdar, the learned Senior Counsel assisted by Mr. B.D. Deka, the learned counsel for the Petitioner and Mr. G. Goswami, the learned Standing Counsel appearing on behalf of the NF Railway as well as Mr. S.C. Keyal, the learned counsel appearing on behalf of the GST Department.
2. The issue involved in the instant writ petition is as to whether the Petitioner would be entitled to the reimbursement of the GST on the differential amount of price variation on steel.
3. The facts involved in the instant case is that the Petitioner which is a joint venture participated in the tender process for construction of a Single Line BG Tunnel No.12 from CH.105840.00 to 115391.00 at CH.112623 and Adit-2 at CH.115391 between Tupul --Imphal in connection with a construction of a new railway line project from Jiribam to Tupul. The Petitioner having emerged as a successful tenderer was awarded the contract vide a letter of acceptance issued by the Respondent No. 3 on 20/7/2015 for a total cost of Rs.784,87,54,402.79 (Rupees Seven Hundred Eight-Seven Crores Eighty-Seven Lakhs Fifty-Four Thousand Four Hundred Two and Seventy-Nine paise only). Subsequent to the letter of acceptance, the Petitioner entered into an agreement with the Respondents through the Respondent No.3 on 31/12/2015.
4. From a perusal of the said contract agreement dated 31/12/2015, it reveals that the general conditions of the contract and the specifications of the North East Frontier Railway, 1998 edition corrected up-to-date and the special conditions and special specifications, if any in conformity with the drawings enclosed therewith formed a part of the Agreement.
5. For the purpose of the instant dispute, Clause 46A of the Indian Railway Standard General Conditions of Contract, which is in Chapter IV is relevant. Clause 46A is the Price Variation Clause(PVC). It stipulates that price variation clause shall be applicable only for tenders of value as prescribed by the Ministry of Railways through instructions/Circulars issued from time to time and irrespective of the contract completion period. It was mentioned that the materials supplied free of cost by the Railways to the contractors shall fall outside the purview of the PVC. In terms with the PVC, the base month shall be taken as the month of opening of the tender, including extensions, if any, unless otherwise stated elsewhere. The quarter for applicability of the PVC shall commence from the month following the month of opening of the tender and the price variation shall be based on the average price index of the quarter under consideration. It further reveals from the said Clause in components of various items in the contract wherein variation in price was admissible. Amongst the components of various items, steel was one of such component. The said Clause 46A of the Indian Railway Standard General Conditions of Contract further details out as to how the PVC would be worked out. As the instant writ petition relates to price variation on steel, the formula for working out the price variation so mentioned in Clause 46A.7(vi) which is as under :
Ms—Amount of Price Variation in steel.
‘Bs’ : SAIL’s (Steel Authority of India Limited) ex-works price plus Excise duty thereof [in rupees per tonne] for the relevant category of the steel supplied by the contractor as prevailing on the first day of the month in which the “steel” was purchased by the contractor (or) as prevailing on the first day of the month in which “steel” was purchased by the contractor or as prevailing on the first day of the month in which “steel” was brought to the site by the contractor, whichever is lower.
‘O’ : Weight of steel in tones supplied by the contractor as per the ‘on account’ bill for the month under consideration.
‘Bso’ : SAIL’s ex-works price plus Excise duty thereof [in Rs per tonne] for the relevant c
Section 2 (62) defines input tax” in relation to a registered person, means central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or both made to hi....
The court established that adherence to procedural guidelines is essential in administrative decisions, particularly regarding financial reimbursements.
Contractors are entitled to reimbursement of differential taxes arising from the transition from VAT to GST based on previous agreements, ensuring compliance with both existing guidelines and timelin....
Mandatory reimbursement of differential GST amounts by contracting authorities for works executed pre-GST, respecting established tax laws and prior contractual obligations.
Tax authorities must provide substantial evidence of fraud or suppression of facts before imposing penalties under Sections 74 and 50, especially when input tax credit has already been reversed volun....
The term ‘amiable compositeur’ is a French term and means an unbiased third party who is not bound to apply strict rules of law and who may decide a dispute according to justice and fairness.
The main legal point established is that the statutory scheme of refund under Section 54(3) of the CGST Act, 2017 applies to cases of accumulation of unutilised input tax credit due to an inverted du....
The court ruled that inadvertent misclassification of IGST as CGST and SGST does not constitute excess credit utilization, especially when no revenue loss occurs.
Taxpayers are eligible for refunds of accumulated input tax credit even when input and output supplies are identical, as clarified through legislative amendments.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
