TaxTMI 
TaxTMI 
2026 (7) TMI 824
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....24 2. 15936 of 2024 09.01.2024 3. 15940 of 2024 25.01.2024 3. This is the second round of litigation before this Court. Earlier, the respective Petitioners have approached this Court for a Mandamus, to direct the 1st Respondent to refund the amount paid by them pursuant to the implementation of Central Goods and Services Tax Act, 2017 and the Tamil Nadu Goods and Services Tax Act, 2017 and the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as the respective GST Enactments) and to determine the GST component payable to them in terms of G.O.Ms.No.296, Finance (Salaries) Department dated 09.10.2017 and determine Price Adjustment as provided under the General Conditions of Contract. 4. The facts on record reveal that the respective Petitioners responded to different packages in a tender floated by the First Respondent for Integrated Storm Water Drainage work in the city of Chennai pursuant to the tenders floated in the year 2015. 5. The respective Petitioners had responded to the bid which was accepted and contracts were awarded to the respective Petitioners for the following packages as detailed below:- Sl. No. Headings ....
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.... of Contract (GCC) are reproduced below:- 43. Tax 45. Price Adjustment 43.1 The rates quoted by the Contractor shall be deemed to be inclusive of the VAT, Sales and other taxes that the Contractor will have to pay for the performance of this Contract. The Employer will perform such duties in regard to the deduction of such taxes at source (TDS) as per applicable law. 43.2 The Project Manager shall adjust the Contract Price if taxes, duties, and other levies are changed between the date 28 days before the submission of bids for the Contract and the date of the last Completion Certificate. The adjustment shall be the change in the amount of tax payable by the Contractor, provided such damages are not already reflected in the Contract Price. 45.1 Contract price shall be adjusted for increase or decrease in rates and price of labour, materials (Cement and Steel only), and other inputs to the works in accordance with the principles and procedures outlined below. A table of adjustment data is included in the PCC which indicates the coefficients of various inputs and the sources of indices for various schedules of BOQ. If the PCC does not include a table of adjustment data ....
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....ost elements may be indicative of resources such as labour, equipment and materials; "Ln" [Labour], "En" [Equipment], "Mn" [Material], .... are the current cost indices or reference prices for period "n", each of which is applicable to the relevant tabulated cost element [Labour, Equipment, Steel, Cement, others] on the date, specified in the Table-2 of Adjustment Data, Prior to the last day of the period (to which the particular Payment Certificate relates); and "Lo", "Eo", "Mo", .... are the base cost indices or reference prices, expressed in the relevant currency of payment, each of which is applicable to the relevant tabulated cost element on the Base Date. (e) The cost indices or reference prices stated in the tables of adjustment data given in PCC shall be used. The base date shall be the date 28 days prior to the date of opening of bids. (f) If the Contractor fails to complete the Works within the Intended Completion date, adjustment of prices thereafter shall be made using either: i. index or price applicable for each cost element tabulated in the tables of adjustment data on the specified date prior to the expiry of the Integrated Completion Date, or ii. ....
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.... appoint the Adjudicator/DRE within 14 days of receipt of such request. 23.1.1 The Adjudicator/DRE should be in position before "notice to proceed with work" is issued to the Contractor and an agreement should be signed with the Adjudicator/DRE jointly by the Employer and the Contractor in the form attached - Appendix 3. 23.2 Should the Adjudicator/DRE resign or die, or should the Employer and the Contractor agree that the Adjudicator/DRE is not functioning in accordance with the provisions of the Contract; a new Adjudicator/DRC shall be jointly appointed by the Employer and the Contractor. In case of disagreement between the Employer and the Contractor, within 30 days, the Adjudicator/DRE shall be designated by the Appointing Authority designated in the PCC at the request of either party, within 14 days of receipt of such request. 24. Procedure for Dispute 24.1 If the Contractor believes that a decision taken by the Project Manager was either outside the authority given to the Project Manager by this Contract or that the decision was wrongly taken, the decision shall be referred to the Adjudictor/DRE within 14 days of the notification of the Pro....
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.... the seller may add so much to the contract price as will be equivalent to the amount paid or payable in respect of such tax or increase of tax, and he shall be entitled to be paid and to sue for and recover such addition; and (b) if such decrease or remission so takes effect that the decreased tax only, or no tax, as the case may be, is paid or is payable, the buyer may deduct so much from the contract price as will be equivalent to the decrease of tax or remitted tax, and he shall not be liable to pay, or be sued for, or in respect of, such deduction. (2) The provisions of sub-section (1) apply to the following taxes, namely,- (a) any duty of customs or excise on goods; (b) any tax on the sale or purchase of goods" 13. In fact, the Clause relevant to taxes as extracted above from the above General Conditions of Contract viz, Clause 43.1 and Clause 43.2 of the General Conditions of Contract, also make it clear that the rates quoted by a Contractor shall be deemed to be inclusive of the Value Added Taxes, Sales Taxes and other Taxes. However, as per Clause 43.2, the Project Manager shall adjust the Contract Price if taxes, duties, and other le....
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....ecuted; (ii) Civil maintenance works contract: Two per cent of the total contract value of the maintenance works executed: (iii) All other works contracts: Five per cent of the total contract value of the works executed. 8. Procedure for assessment.- (1) ..... (2) ..... (3) ..... (4) ..... (5) The taxable turnover of the dealer liable to pay tax under Section 5 on transfer of property in goods involved in the execution of works contract shall be arrived at after deducting the following amounts from the total turnover of that dealer, namely:- (a)... (b)... (c)... (d) All amount towards labour charges and other charges not involving any transfer of property in goods, actually incurred in connection with the execution of works contract contract, or such amounts calculated at the rate specified in column (3) of the Table below, if they are not ascertainable from the books of accounts maintained and produced by a dealer before the assessing authority. Sl. No. Type of works contract Labour or other charges as a percentage value of the works contract (1) (2) (3) 1. Electrical contracts 15 2. All structural contracts 1....
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....installation, completion, fitting out, repair, maintenance, renovation, or alternation of- In the said Notification,- (i) .... (ii) in entry 12, items (a), (c) and (f) shall be omitted; After entry 12, with effect from the 1st March, 2016, the following entry shall be inserted, namely- 12A. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alternation of- (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; * Deleted (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; under a contract which had been entered into prior to the 1st March, 2015 and on which appropriate stamp duty, where applicable, had been paid prior to such date: Provided that nothing contained in this entry shall apply on or after the 1st April, 2020. (b) a historical monument, archaeological site or remains of national importance, archaeologic....
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....wever, for the period after 01.07.2017, tax was to be paid under the GST regime. It is precisely for such an eventuality Clause 43.2 has been provided in the General Conditions of Contract (GCC) incorporating the principle in Section 64-A of the Sales of Goods Act, 1930 as mentioned above and Clause 43.2 of the General Conditions of Contract as per which the Project Manager shall adjust the Contract Price if taxes, duties, and other levies are changed between the date 28 days before the submission of bids for the Contract and the date of the last Completion Certificate. 23. Thus, the change in the rate of taxes, duties, and other levies between the date 28 days before the submission of bids and the date of the last Completion Certificate is to be charged by the project manager. Only restriction is that such damages are not reflected in the contract price. 24. Therefore, the amount of tax due to the change in the tax regime has to be reimbursed to the respective Petitioners. In fact, Clause 6 of G.O.Ms.No.296, Finance (Salaries) Department dated 09.10.2017 also resonates with this expressly. 25. The reasons given in the Order dated 25.01.2024 impugned in W.P.No.15940 of 202....