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TMI Blog2024 (12) TMI 826X X X X Extracts X X X X X X X X Extracts X X X X ..... t of construction of a barrage (works contract) at Medigadda, Telangana, undertaken by the petitioner in both the writ petitions, we decided to hear both the writ petitions together and dispose of the same by way of this common order. 3. For convenience, we are referring to the facts in Writ Petition No. 19376 of 2020. 4. The petitioner is an unincorporated Joint Venture (JV), comprising of two partners viz., Larsen & Toubro Ltd (L&T) and PES Private Limited. The petitioner has received a contract from 5th Respondent-State of Telangana for construction of Medigadda Irrigation Barrage at Kaleshwaram, State of Telangana. The petitioner has been chosen to execute the project based on the technical qualification criteria of the partners. The project is sponsored by the State of Telangana, but the execution of contract is spread between the States of Telangana and also Maharashtra; that there was a specific Inter-Board Agreement dated 23.08.2016 signed by both Telangana and Maharashtra States through Hon'ble Chief Ministers. For this purpose a special utility vehicle called as Kaleshwaram Irrigation Project Corporation Limited (hereinafter referred to as 'KIPCL') i.e., respondent no. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of the work pertaining to State of Maharashtra cannot be retained by the State of Telangana merely because the contract is funded by the Telangana State, which is the basis for rejection by the 1st respondent; that as per proviso to Section 51, no deduction is required to be made if location of the supplier and place of supply is in State which is different from the State of the registration of the recipient. Therefore, 4th Respondent is not required to deduct tax under Section 51 since the location of Petitioner and place of supply is in Maharashtra while the recipient is in Telangana. 4.4. As a consequence of refund rejection order, the 1st respondent also proposed to raise a demand of Rs. 14,28,54,110/- towards CGST & SGST for the period April, 2019 to July, 2019. Though the petitioner filed reply claiming that the demand is not sustainable since the TDS deducted by 4th respondent was to be deposited proportionate to the State of Telangana and State of Maharashtra based on actual value of work executed in two states. Petitioner also placed reliance on a letter dated 13.01.2020 of the Executive Engineer, Irrigation and Command Area Development of Medigadda that TDS under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Petitioner, vide order, dated 12.10.2020. The 6th respondent, by referring to the provisions of the CGST/SGST and IGST Act, held that the petitioner has liability to take registration and report the turnovers based on the quantum of work that took place in the State of Telangana and State of Maharashtra separately. That it is an intra-state supply of services, both in State of Telangana and in the State of Maharashtra; that petitioner was held to be eligible to claim credit for the taxes collected from it in the invoices raised by the two constituent entities of J.V. The approach of the 1st respondent to dismiss the submissions of petitioner, without applying the provisions of the Act and assessing the entire turnover of the petitioner in the State of Telangana is liable to be declared as illegal. 4.8. However, the 6th respondent while reconciling the turnovers of taxes between those determined by the 1st respondent and furnished by the petitioner, has sought apportion the TDS amount partly to the State of Telangana, based on the proportion of the output tax reported in Telangana and likewise for the State of Maharashtra. Accordingly, a sum of Rs. 4,55,65,816/- was calculated a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has no jurisdiction to examine the transactions of other states including the State of Maharashtra. As projected by the petitioner, the disputed TDS amount on which the writ petitioner claims refund relates to the works executed in the State of Maharashtra and accordingly, the 6th respondent rejected the claim of refund of TDS amount relating to works executed by the petitioner in the State of Maharashtra. 5.3. It is contended that the petitioner should have approached the 4th respondent to resolve its problem as petitioner itself lays blame on 4th respondent. With regard to the refund of amount, the 6th respondent examined the issue of refund of TDS amount only to the extent it relates to the work executed in the State of Telangana, but not the entire TDS amount as claimed by the petitioner. Though petitioner claims to have independently discharged the liability in the State of Maharashtra, it is not for the 6th respondent to examine the veracity of the claim; that there was no liability to discharge independently by the petitioner in the State of Maharashtra. 5.4. It is averred that 6th respondent adopted the proportionate method to grant refund because the petitioner did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government based on the place of supply and remaining half of the amount of taxes goes to the Central Government. Therefore, fixing the 'place of supply' is paramount in adjudicating the issue as to which State Government treasury gets the tax and to what extent. 9. It is further contended that based on some sample invoices, petitioner tried to show that it had billed a non-existent entity in Maharashtra; that the contentions of petitioner itself in representing to the 1st respondent and also in the affidavit of W.P.No.6299 of 2020 nail a lie; that admittedly, the Government of Telangana, which entered into contract with the petitioner, does not have any existence in the State of Maharashtra. That the said fact was admitted by the petitioner and asserted by the petitioner that since Government of Telangana does not have any existence in the State of Maharashtra, it could not have deducted any TDS. That as admitted by the petitioner and 4th respondent, the total cost of the project was borne by the Telangana Government and there was no bifurcation of payment in respect to the work done in Maharashtra or Telangana territories. That since the 'place of supply' entirely falls under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount relating to Maharashtra registration should be claimed in that State. 14. Since the nature of supply is of the intra-state in respective States, the tax liability shall be discharged individually in each State equivalent to the work executed in respective states. As such the tax liability for the work executed in Telangana shall be payable in Telangana. It is pertinent to note that petitioner JV failed to place on record inter se agreement entered between L&T and PES with regard to works allotted and executed by each partner. It is contended that JV is a pass through entity and in fact the project works were executed by the partners of JV independently. Also further contended that partners of JV raises bills in favour of the JV and which in turn raises bills in favour of 4th respondent by taking input credit. 15. Since no material is placed on record with regard to proportion of work executed by each partner of JV independently, it is not possible for this court to determine the proportion of work executed in both States and tax liability thereof. It is contended by the petitioner that tax liability has been discharged independently for the works executed in the State of Mah ..... X X X X Extracts X X X X X X X X Extracts X X X X
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