D.B.S. Construction (P.) Ltd. V/s State of Bihar (HIGH COURT OF PATNA) : Date of order 25-06-2024
Case Study Name: D.B.S. Construction (P.) Ltd. V/s State of Bihar (HIGH COURT OF PATNA) :
Date of order 25-06-2024
Background:
D.B.S. Construction (P.) Ltd. (the petitioner) had undertaken a contract in 2009 which was completed before 2015, during which the Value Added Tax (VAT) regime was in effect. However, GST, which replaced VAT, was deducted at 18% for payments related to this pre-GST contract.
Key Ruling:
- Grievance and Relief Sought:
- The petitioner contended that GST was incorrectly deducted for a contract that was executed and completed before GST came into force in 2017.
- Court’s Decision: The High Court acknowledged the petitioner’s grievance and allowed them to withdraw their writ petition with liberty to approach the appropriate authorities for a refund of the GST that was deducted erroneously.
- Directive for Refund Process:
- Conditions: If the petitioner makes a representation for the refund of GST, the authorities are directed to process it in accordance with the law.
- Timely Disposal: The court instructed the authorities to handle the refund claim expeditiously, ideally within eight weeks from the date of the petitioner’s representation.
Explanation:
- Pre-GST Contract Issue: The crux of the matter was that the contract in question was executed and completed before GST was implemented. Therefore, according to the petitioner, GST should not have been applicable to payments related to this specific contract.
- Legal Redressal: The High Court’s decision grants the petitioner the right to seek a refund of the GST that was deducted erroneously. This is based on the principle that taxes should be levied as per the prevailing laws at the time of the transaction, and in this case, GST should not have been deducted for a pre-GST contract.
- Process for Refund: The court has directed the authorities to handle the refund claim promptly and in accordance with the law. This includes verifying the claim and returning the amount if it is found that GST was indeed improperly deducted.
Conclusion:
This ruling ensures that D.B.S. Construction (P.) Ltd. can pursue a refund of the GST erroneously deducted for a contract executed and completed before GST was applicable. It underscores the importance of correct tax application based on the timeline of transactions and directs a swift resolution of the refund claim by the concerned authorities.
By granting liberty to approach for refund and setting a timeline for disposal, the High Court seeks to uphold fairness and compliance with tax laws while protecting the rights of the petitioner in this legal matter.
Section Reference – 9 of CGST ActTop of Form
