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2023 (2) TMI 396 - HC - GSTNon-payment of GST - Non getting the disbursement of GST amount from the recipient of services - It is the case of the petitioner that it is a partnership firm, which is undertaking several works contracts for the respondents and has been raising running bills which have been paid by the respondents, but the payment of GST on such bills is not being made by the respondents - HELD THAT - After the enforcement of the GST regime, the respondent no.1 issued a Government Order on 09.11.2017 directing various Heads of Departments that contracts for new works and contracts which were already in existence and were awarded before the GST regime, all were to be governed by the GST regime and the additional tax burden shall be computed with the help of formula with respect to existing contract provided under the Government Order dated 09.11.2017. The amount of additional tax burden so determined had to be paid to the contractor and the said amount of tax was thereafter to be deposited by the contractor with the department. Another clarification was issued in this regard on 26.10.2021 also, a copy of which has been filed as annexure to the petition which is in the nature of explaining liability for payment of GST. The petitioner has made several requests by various means including making representations, details of which have been given in the petition, but the respondents no. 3 to 5 have not disbursed the GST amount to the petitioner. The petitioner consequently could not deposit the huge amount of tax liability with the GST Department and they are in the process of initiating recovery proceedings against the petitioner. The petitioner's last representation dated 31.03.2022 has indicated the grievance made by the petitioner to the Executive Engineers, Provincial Division, PWD of Districts Basti, Pratapgarh and Sant Kabir Nagar. Such representations are pending. This petition is disposed of with a direction to the petitioner to make a fresh representation to the respondent no.2 who shall seek a clarification from the Engineer-in-Chief and the respondent no. 1 and then decide the representation of the petitioner by a reasoned and speaking order within a period of two months from the date of making of such representation.
Issues:
Petition for mandamus to pay outstanding amount and GST liability on running bills. Analysis: Issue 1: Mandamus to Pay Outstanding Amount The petitioner, a partnership firm, filed a petition seeking a writ of mandamus to direct the respondents to pay an outstanding amount of Rs. 7,97,88,026.31 along with interest. The petitioner claimed that it had undertaken various works contracts for the respondents and raised running bills, which were paid by the respondents. However, the respondents failed to pay the GST on these bills, leading to a dispute. The petitioner highlighted that prior to the implementation of the GST regime, there were no issues with payments. The Government Order dated 09.11.2017 directed that contracts awarded before the GST regime should also be governed by the GST regime, with the additional tax burden calculated using a specific formula. Despite the petitioner's efforts to address the non-payment issue through representations and requests, the respondents did not disburse the GST amount, resulting in potential tax liability for the petitioner. The court disposed of the petition by directing the petitioner to submit a fresh representation to the concerned authorities for a decision within two months. Issue 2: GST Liability on Running Bills The petitioner also sought a mandamus to ensure the payment of GST on the running bills raised for the ongoing contracts. The respondents had been deducting tax at a rate of 2% (1% CGST and 1% SGST) from the payments made to the petitioner, which the petitioner argued was only a partial deduction of the total tax liability. The petitioner emphasized that the running bills were subject to the Government Order of 09.11.2017 and the clarificatory order of 26.10.2021, which outlined the liability for GST payment. Despite multiple requests and representations to the respondents, the petitioner faced challenges in receiving the full payment inclusive of GST. This non-payment of GST led to difficulties for the petitioner in meeting its tax obligations to the GST Department, potentially resulting in recovery proceedings. The court's directive for a fresh representation aimed to address this issue by seeking clarification from the concerned authorities and ensuring a reasoned decision within a specified timeframe. In conclusion, the judgment addressed the petitioner's grievances regarding non-payment of GST on running bills and outstanding amounts by directing them to make a fresh representation for resolution within two months. The detailed analysis highlighted the legal framework surrounding the GST liability, contractual obligations, and the court's approach to resolving the dispute through administrative channels.
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