Works contract GST rate dispute after 01.07.2017: claim for 6% differential disbursement sent for administrative decision.

The dominant issue was whether a writ could compel the authority to disburse the alleged differential GST (6%) for works contracts post-01.07.2017 on the footing that an 18% rate applied, despite the petitioner not having paid appropriate GST for the executed works. Relying on prior HC rulings holding that the pre-30.06.2017 regime and the post-01.07.2017 GST regime apply distinctly to such contracts, the Court held that the petitioner's claim required administrative determination under the relevant Government orders and law. Consequently, the competent authority was directed to consider and decide the representation on merits after hearing the petitioner within four weeks, and the writ was disposed of.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether the Court should issue a direction to the procuring entity to consider and decide the petitioner's pending representation seeking disbursement of the alleged differential GST (6%) for works executed from 01.07.2017, along with related consequences claimed (interest/penalty arising from the rate discrepancy).

(ii) What timeline and decision-making parameters should govern such consideration, including whether the authority must consider the stated Board Resolution and the relevant Government orders referred to in the materials before the Court.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Direction to consider and dispose of the representation seeking differential GST amount

Legal framework (as addressed in the judgment): The Court proceeded on the basis that the grievance pertained to GST rate treatment in payment certifications for works contracts after introduction of the GST regime from 01.07.2017, and that the petitioner had submitted a representation dated 04.12.2024 seeking disbursement of the alleged difference. The Court also noted that similar matters had earlier been disposed of by issuing directions for administrative consideration, and it required consideration "in accordance with law".

Interpretation and reasoning: The Court recorded that the petitioner's case was that payment certifications applied 12% GST while the petitioner asserted that 18% was applicable from 01.07.2017, resulting in an alleged 6% shortfall. It further noted that a show cause notice had been issued by the investigating authority alleging non-payment of appropriate GST and demanding interest and penalty. In this context, and with both sides submitting that comparable writ petitions had been disposed of with directions to consider contractors' difficulties and the allocation of GST-regime liability, the Court considered it appropriate to require the competent authority to take a decision on the representation rather than adjudicating the monetary entitlement itself in the writ proceedings.

Conclusion: The Court conclusively directed the second respondent to consider the representation dated 04.12.2024 on its own merits and to pass appropriate orders.

Issue (ii): Manner, timeline, and materials to be considered while deciding the representation

Legal framework (as addressed in the judgment): The Court expressly required the authority to decide the representation "in accordance with law", and specifically indicated that such consideration must include the "relevant Government orders" referred to in the materials before it. It also mandated adherence to principles of fairness through an opportunity of hearing.

Interpretation and reasoning: Having regard to the submissions that similar cases were disposed of with directions referencing Government orders addressing GST-regime impacts on works contracts, the Court required the authority to factor those Government orders while deciding the petitioner's request. The Court also mandated that the petitioner be granted a reasonable opportunity before a final decision is made, and fixed a definite time limit to avoid further delay.

Conclusion: The Court directed that, after granting the petitioner reasonable opportunity, appropriate orders must be passed within four weeks from receipt of the order, and that the decision must be in accordance with law, including consideration of the relevant Government orders.

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