Request-specific road restoration attracts reverse-charge GST because it is a paid commercial service, not an exempt public function.
Request-specific road restoration performed by a government authority for a business entity's commercial pipeline project constitutes a taxable supply for consideration, with GST payable by the recipient under reverse charge. Targeted restoration differs from routine public road maintenance and does not qualify as a sovereign public-function activity, non-supply, or exemption linked to constitutional local-government functions. Refund sanctions in other jurisdictions do not create binding precedent or res judicata, and an unsupported assertion that tax was already paid does not displace reverse-charge liability. Electronic GST portal records can establish the authenticity of refund proceedings despite the absence of a physical DIN, where the notice adequately discloses the grounds and causes no prejudice.
Issues: (i) Whether road-restoration charges paid to the PWD under a request-driven arrangement constituted consideration for a taxable supply subject to reverse charge; (ii) Whether the service was excluded as a non-supply or exempt as an activity related to functions under Articles 243G and 243W; (iii) Whether refund sanctions in other States or an asserted prior tax payment negated reverse-charge liability; and (iv) Whether the SCN and adjudication were invalid for vagueness, absence of a DIN, or breach of natural justice.
Issue (i): Whether road-restoration charges paid to the PWD under a request-driven arrangement constituted consideration for a taxable supply subject to reverse charge.
Analysis: Sections 7(1) and 2(31) of the Central Goods and Services Tax Act, 2017 encompass services supplied for consideration. The payment followed a voluntary application for permission to excavate public roads for a commercial pipeline project, and the PWD undertook a specific physical restoration activity calculated with reference to the work required. This established direct transactional reciprocity, rather than compensation for a unilateral wrongful act or liquidated damages.
Conclusion: The road-restoration charges constituted consideration for a taxable supply of services, and GST was payable by the recipient under reverse charge. This finding is against the assessee.
Issue (ii): Whether the service was excluded as a non-supply or exempt as an activity related to functions under Articles 243G and 243W.
Analysis: Routine upkeep of public roads for the community may be a public-authority function. However, targeted restoration undertaken at the request of, and for the commercial benefit of, a specific business entity was not a sovereign public-welfare activity. The expression "in relation to" could not enlarge the non-supply or exemption provisions beyond their text, particularly where Entry 6(d) of Notification No. 12/2017-Central Tax (Rate) excludes services supplied by Government or a local authority to business entities.
Conclusion: The restoration service was neither a non-supply nor an exempt public-function service under the constitutional-function provisions or the cited notifications. This finding is against the assessee.
Issue (iii): Whether refund sanctions in other States or an asserted prior tax payment negated reverse-charge liability.
Analysis: A refund sanction by a proper officer in another State did not operate as a binding precedent or res judicata. Further, no clear evidence established that the PWD had issued a GST invoice or deposited tax under forward charge for the particular transaction. The statutory reverse-charge mechanism could not be displaced by an unsubstantiated claim of dual taxation or revenue neutrality.
Conclusion: Neither refund orders in other jurisdictions nor the asserted prior payment of tax negated the reverse-charge liability or supported the refund claim. This finding is against the assessee.
Issue (iv): Whether the SCN and adjudication were invalid for vagueness, absence of a DIN, or breach of natural justice.
Analysis: The notice sufficiently disclosed the factual and legal basis for denying the refund, and the detailed reply demonstrated that there was no surprise or prejudice. The refund proceedings, notice, replies, and order were issued and maintained through the authenticated electronic GST portal. In those circumstances, absence of a physical DIN did not impair the identity, integrity, or authenticity of the proceedings.
Conclusion: The proceedings were not invalid for vagueness, absence of a DIN, or breach of natural justice. This finding is against the assessee.
Final Conclusion: The reverse-charge payment on the request-specific road-restoration service was lawfully payable, and no refund entitlement arose.
Ratio Decidendi: A Government authority's request-specific road-restoration service supplied to facilitate a business entity's commercial activity for a fee is a taxable supply for consideration and does not obtain non-supply or exemption treatment as a sovereign public-function activity.