2024 (9) TMI 445 - HC - GST

Legal Battle Over GST Rates for Rural Infrastructure Resolved with Procedural Directives and Temporary Relief for Petitioner

Shibesh Kumar Das Versus Joint Commissioner, Commercial Taxes & State GST, Cooch Behar Charge & Ors.

SC ruled on a GST rate dispute for rural infrastructure construction work. The court directed the petitioner to submit a comprehensive reply to a Show ... GST rate on construction work under Pradhan Mantri Gramin Sadak Yojna - HELD THAT:- Upon perusal of the materials on record to sub serve justice the petitioner shall submit its composite reply to the said Show Cause Notice dated August 9, 2024, Annexure-P7 at page 37 to the writ petition within a period of two weeks from date. The petitioner shall be at liberty to take all the points he wishes to urge before the authority by relying upon whatever records and documents he wishes to reply upon. After receiving the said reply to show cause, the respondent no. 3 upon issuing a prior hearing notice of at least seven days to the petitioner and the respondent no.6 and after giving them an opportunity of hearing shall decide the issue by passing a reasoned order in accordance with law. The entire exercise shall be carried out and completed by the respondent no. 3 positively within a period of six weeks from the date of receiving the reply to show cause from the petitioner as directed above. The reasoned order then shall be communicated to the petitioner, positively within a further period of two weeks from the date of the said reasoned order to be passed by the respondent no. 3 - this Court has not gone into the merits of the writ petition and the petitioner shall be at liberty to urge whatever points he wishes to urge before the respondent no. 3 on the issue. Petition disposed off. Issues:Dispute over GST rate on construction work under Pradhan Mantri Gramin Sadak Yojna.Analysis:The petitioner conducted construction work under the Pradhan Mantri Gramin Sadak Yojna based on a Work Order that initially had a GST rate of 12%. However, the GST authority later increased the rate to 18%, leading to a dispute over the additional 6% GST. The respondent nos. 4 to 6 have raised the issue before the National Rural Infrastructure Development Agency (NRIDA), and the matter is pending. The petitioner received a Show Cause Notice directing them to justify why the GST should not be charged at 18% of the total Work Order Value.The petitioner argued that the responsibility to pay the additional 6% GST lies with respondent nos. 4 to 6, who have already raised the matter before the NRIDA. The State counsel representing the respondents stated that the petitioner must participate in the hearing following the issuance of the Show Cause Notice. The court directed the petitioner to submit a comprehensive reply to the Show Cause Notice within two weeks, allowing them to present all relevant points and supporting documents.After receiving the petitioner's response, respondent no. 3 will issue a prior hearing notice to both the petitioner and respondent no. 6, providing an opportunity for a hearing. Subsequently, respondent no. 3 will decide the issue and issue a reasoned order in accordance with the law. The entire process, including the decision and communication of the reasoned order to the petitioner, must be completed within six weeks from receiving the petitioner's reply.The court clarified that it did not delve into the merits of the case, allowing the petitioner to present their arguments before respondent no. 3. No coercive action can be taken against the petitioner until two weeks after receiving the reasoned order. The court disposed of the writ petition without any costs, emphasizing that the allegations in the petition were not deemed admitted by the respondents. Finally, the court directed the prompt provision of a certified copy of the order upon request.