Works contract GST demand quashed; court directed reimbursement of tax differential and supplementary tender revision.

Where a GST demand arising from a post-GST works contract was already covered by binding earlier High Court rulings, the impugned show cause notice and order in original under section 74 were quashed. The Court applied those earlier directions to hold that the concerned authority must rectify and withdraw the demand, reimburse the GST and differential tax amount, and execute a supplementary tender agreement where required to reflect the revised work value. The relief was granted in line with the Court's prior decisions governing reimbursement of GST and tax differential in works contract disputes.

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Issues: (i) Whether the show cause notice and the order in original passed under section 74 of the Central Goods and Services Tax Act, 2017 were liable to be quashed. (ii) Whether the respondents were liable to rectify the tax demand and reimburse the GST and differential tax amount and enter into a supplementary tender agreement.

Issue (i): Whether the show cause notice and the order in original passed under section 74 of the Central Goods and Services Tax Act, 2017 were liable to be quashed.

Analysis: The relief was sought in the light of the earlier decision of the same Court and the subsequent co-ordinate Bench ruling, both of which had already answered the controversy arising from post-GST works contracts and the treatment of tax differential. The petition was considered to fall within the same legal framework, and the impugned demand proceedings were examined against those binding directions.

Conclusion: The show cause notice and the order in original were quashed.

Issue (ii): Whether the respondents were liable to rectify the tax demand and reimburse the GST and differential tax amount and enter into a supplementary tender agreement.

Analysis: Once the impugned GST demand was set aside, the Court applied the earlier directions requiring the employer or concerned authority to work out the tax difference, reimburse the admissible GST amount, and, where necessary, execute a supplementary agreement to reflect the revised work value. The relief was made consistent with the earlier rulings governing reimbursement of GST and differential tax on works contracts.

Conclusion: The respondents were directed to rectify and withdraw the demand, reimburse the GST and differential tax amount, and enter into the necessary supplementary tender agreement.

Final Conclusion: The writ petition succeeded and the petitioner obtained complete relief against the GST demand, with consequential directions for reimbursement and contractual revision in accordance with the earlier binding decisions.

Ratio Decidendi: Where the dispute over a works contract and GST liability is covered by binding earlier decisions of the Court, the impugned tax demand can be quashed and consequential reimbursement and contractual adjustments can be directed in line with those decisions.

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