Jks Infowards A Partnership Firm vs. The State Of Madhya Pradesh And Others
(Madhya Pradesh High Court, Madhya Pradesh)

Case Law
Petitioner / Applicant
Jks Infowards A Partnership Firm
The State Of Madhya Pradesh And Others
Madhya Pradesh High Court
Madhya Pradesh
Jul 20, 2021
Order No.
TR Citation
2021 (7) TR 4938
Related HSN Chapter/s
Related HSN Code


This writ petition has been filed by M/s. JKS INFOWARDS, Rewa through its Partner- Mr. Ramnath Shukla seeking the following reliefs:

“7.1 This Hon’ble Court may kindly be pleased to issue Writ in the nature of Mandamus, directing the respondents to dispose of the representation dated 18/19.03.2021 (Annexure P-02) and dated 28.06.2021 (Annexure P-08) submitted by the petitioner and may be pleased to direct the respondents for payment of ₹ 13,80,802.00 towards GST amount in view of Annexure P-02.

7.2 This Hon’ble Court may be pleased to issue Writ in the nature of Mandamus, directing the Respondents to make the payment/reimbursement of the applicable GST on the amount of work executed and the Petitioner may further be exonerated from all the GST Liabilities, in respect of the Contract under reference and/or refund of the same as recovered by respondent No.6..

7.3 Alternatively, this Hon’ble Court may be pleased to direct the Respondents to make policy to deal with the issue of payment of GST on the Works Contract executed prior to GST implementation i.e. 01.07.2017 and work of which were continued post 01.07.2017 wherein, GST is not paid by the Department but, was levied while procurement of the Goods and Materials, in light of the arrangements made by the Union of India, State of Bengal and State of Orrisa or as the case may be as this Hon’ble deem it fit and proper.

7.4 Any other and further relief/relieves, order/orders, direction/directions, which this Hon’ble Court may deem fit and proper in the circumstances of the case and thus render justice.”

The facts as stated in the petition are that the petitioner is a Partnership Firm and is engaged in the Civil construction activities since decades and has undertaken the contracts of various Government Departments, Semi- Government Departments, Municipal Corporation, Housing Board etc. The petitioner was awarded with the work of repair and maintenance of Rural Road for five years constructed under PMGSY Package No.MP-32-MTN-54 vide Letter of Acceptance dated 15.11.2016 and work order dated 7.2.2017 (Annexure P-01) for a value of ₹ 169.42 lakhs. The petitioner had entered into contracts prior to enactment of Goods and Service Tax Act, 2017 (GST), which was enforced w.e.f. 01.07.2017. Prior to enforcement of GST, the petitioner had been paying tax levied under the VAT regime, but after enactment of GST, the petitioner has been subjected to payment of GST, which has caused additional burden on the petitioner. Consequently, the petitioner requested for payment of ₹ 13,80,802.00 towards GST on the work executed after 01.07.2017 from the respondents, which request was not considered by the respondent No.8- General Manager, M.P. Rural Road Development Authority, Rewa.

Mr. Atul Kumar Jain, learned counsel for the petitioner contended that in the period when VAT was applicable, the rate of VAT was 5% on the material purchased for execution of the work under the contracts, the Tax (Advance Commercial Tax Head) liability was of 2% only, which was in the form of TDS and would be adjusted at the time of filing return, therefore, the rates were quoted accordingly keeping in mind the applicable rates of taxes and burden of tax payment, which were also adjusted towards liabilities against tax paid during procurement and excess amount of which were refunded to the petitioner from time to time. After implementation of GST, the GST on material purchased is 5%, 18% and 28% on construction material and there is no provision of input tax credit for the works contract and, apart from this, GST on bill amount is imposed @ 12%.

Learned counsel further submitted that the Union of India has enforced the Goods and Service Tax w.e.f., throughout the country and the same is applicable all the works contracts too. In view of the recommendation of the General Administration Department of Government of Madhya Pradesh, the State Government, Public Works Department passed an order dated 5.8.2017 and the Urban Administration Department issued order dated 14.11.2018 that the GST is payable by the department in all the works contract with a clarification that tenders in future will be called for excluding of GST and the amount of GST would be paid separately over the value of the executed work to the contractor, provided the contractor shall be registered and have the GST number and all other taxes, levies etc. will be liabilities of the contractor.

Learned counsel for the petitioner further contended that considering the difficulties and ambiguity in respect of the payment of GST on the works contract executed prior to 01.07.2017 which continued post GST implementation, the Central Government, Ministry of Railway, even had considered the fact of over burden on the contractor and diligently passed order to make appropriate arrangements to bridge the gap between the existing tax liabilities and new GST liabilities, making it a partnering efforts to accommodate their contractors and in the interest of the work, thereby the burden of GST liability towards heavy rate tax shall not be burdened on the contractor alone and introduced concept of neutralization in their circular dated 27.10.2017. Similarly, the State of Bengal and Orrisa have also issued notifications dated 16.08.2017 and 07.12.2017 respectively and introduced different mechanism to deal with such works contracts, which are though executed pre-GST regime but were continued thereafter to accommodate the contractors, saving them from over burdened taxes and double jeopardies.

Learned counsel submitted that in similar writ petition i.e. W.P.No.10282/2021 (M/s Arun Construction Company, Rewa Vs. State of M.P. & others) decided on 23.6.2021, this Court directed the Principal Secretary, PWD to decide the representation submitted by the petitioner. The present petitioner also intends to again file a comprehensive representation before the respondents, which may be directed to be considered for redressal of his grievance.

Having regard to the submissions made and the arguments advanced, we deem it proper to direct the respondent No.3- Principal Secretary, Public Works Department, Government of M.P., Bhopal to decide the said representation which will be filed by the petitioner by a speaking order after providing opportunity of hearing to the representative of the petitioner within a period of three months from the date copy of this order is produced before him.

With the aforesaid direction, the present writ petition stands disposed of.

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