GST liability cannot be altered by contract; directions for revised returns and waiver were set aside, reimbursement confined to employer.

Contractual arrangements could not alter GST liability or the statutory scheme for assessment, recovery and enforcement, so directions allowing revised returns and blanket waiver of interest, penalty and limitation were unsustainable and were set aside as against the tax authorities. A reimbursement direction for incremental GST on the contract was a matter between the contractor and the employer and could not be treated as binding the GST authorities or the State; it was confined to the employer. The operative effect was that the impugned directions against the tax authorities and State were removed, while reimbursement obligations remained contractual.

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Issues: (i) Whether directions could be issued to the GST authorities permitting revised returns and waiving interest, penalty and limitation contrary to the GST statute; (ii) Whether the direction to reimburse GST dues could be construed as binding the tax authorities/State.

Issue (i): Whether directions could be issued to the GST authorities permitting revised returns and waiving interest, penalty and limitation contrary to the GST statute.

Analysis: The liability to pay GST, and the manner of assessment, recovery and enforcement, is governed by the relevant GST enactments and cannot be altered by contractual arrangements between the contractor and the employer. Directions enabling filing of revised returns contrary to the statutory scheme, or granting blanket waiver of interest, penalty or limitation, were not sustainable.

Conclusion: The directions permitting revised returns and waiving interest, penalty and limitation were unsustainable and were set aside insofar as they related to the tax authorities.

Issue (ii): Whether the direction to reimburse GST dues could be construed as binding the tax authorities/State.

Analysis: The dispute regarding reimbursement of incremental GST paid or payable on the contract was a matter between the contractor and the employer under the contract. The reimbursement direction could not be read as imposing any payment obligation on the GST authorities; it had to be confined to the concerned employer.

Conclusion: The reimbursement direction was confined to the employer and did not bind the tax authorities or the State.

Final Conclusion: The appeal succeeded to the extent that the impugned directions against the GST authorities and State were set aside, while the contractual reimbursement aspect was left to operate only against the employer.

Ratio Decidendi: Contractual arrangements cannot alter statutory GST liability or justify directions contrary to the GST enactments, and a reimbursement direction for tax incidence must be confined to the contracting employer unless the statute provides otherwise.

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