Auction sale tax liability fixed by contract cannot be shifted to GST by later law where sale was already complete.

Where an auction sale is complete and the contract expressly fixes tax liability on the date of sale, a later change in tax law does not displace that agreed obligation unless the statute or contract clearly so provides. The Bombay HC held that the auction terms required payment of taxes prevailing when the sale was completed, and delay in payment with interest did not convert the transaction into one governed by the later GST regime. Section 142(10) of the Maharashtra GST Act was inapplicable, and Section 64-A of the Sale of Goods Act, 1930 did not override the contractual allocation of tax burden. The petition was dismissed.

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Issues: (i) Whether the petitioner was entitled to pay tax on the auctioned timber under the Maharashtra Goods and Services Tax Act, 2017 instead of the taxes stipulated in the auction terms and conditions, and whether Section 142(10) of that Act altered the tax liability.

Analysis: The auction terms fixed the tax liability on the date of completion of sale and required payment of the balance consideration with the then applicable taxes, together with interest on delayed payment. The sale was complete when the auction was concluded, and the goods were ready for delivery on those dates. Section 142(10) was held inapplicable because the supply was not treated as occurring on or after the appointed day for purposes of changing the agreed tax burden. The delay in payment, which attracted interest, could not be used to convert the transaction into one governed by the later GST regime. The reliance on Section 64-A of the Sale of Goods Act, 1930 also failed because the contract showed a different intention and expressly fixed the tax obligation.

Conclusion: The petitioner was not entitled to substitute GST for the tax liability fixed under the auction contract and the prevailing law on the dates of sale.

Final Conclusion: The petition failed, and the auction purchaser remained bound by the agreed tax terms and the tax law in force when the sales were completed.

Ratio Decidendi: Where a sale by auction is complete and the contract expressly fixes tax liability, a subsequent change in tax law does not displace the agreed obligation unless the statute or contract clearly provides otherwise.

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