GTS Coal Sales VS Directorate General of GST

In these consolidated writ applications, the issues at hand are identical, prompting a joint hearing and resolution by this single order. The petitioners in both cases seek redressal in the form of a refund of amounts involuntarily deposited: Rs. 60 lac in W.P.(T) No. 1539 of 2021 and Rs. 47,64,900/- in W.P.(T) No. 14 of 2021, without any prior demand or adjudication proceeding. Additionally, both petitioners request a declaration that the services they rendered under work orders from Coal Companies should be categorized under Chapter Heading No. 9965 of Tariff Rules, specifically identified as ‘Goods Transport Agency Services’, with a tax rate of 12%. Currently, these services are classified under Chapter Heading No. 9986, denoted as ‘Support Services to Mining’, subject to a higher tax rate of 18%.

Two writ applications were heard together due to common issues. The petitioners in both cases sought a refund of involuntarily deposited amounts: Rs. 60 lakh in W.P.(T) No. 1539 of 2021 and Rs. 47,64,900/- in W.P.(T) No. 14 of 2021, without any prior demand or adjudication proceeding. They also requested a declaration that the services they provided under work orders from Coal Companies should be classified under Chapter Heading No. 9965 of Tariff Rules (‘Goods Transport Agency Services’), taxable at 12%, rather than Chapter Heading No. 9986 (‘Support Services to Mining’), which is taxed at 18%.

In W.P.(T) No. 1539 of 2021, an alternative prayer was made for a mandamus directing the Respondent-Coal Company to reimburse the differential tax of 6% to the petitioner, as the GST authorities had classified the work under Chapter Heading No. 9986, resulting in an 18% tax levy.

Two writ applications (W.P.(T) No. 1539 of 2021 and W.P.(T) No. 14 of 2021) were heard together due to common issues. The petitioners in both applications sought refunds of involuntarily deposited amounts: Rs. 60 lakh in W.P.(T) No. 1539 of 2021 and Rs. 47,64,900/- in W.P.(T) No. 14 of 2021, without any demand or adjudication proceedings. They also requested a declaration that the services they provided under work orders from Coal Companies should be classified under Chapter Heading No. 9965 of Tariff Rules (Goods Transport Agency Services), taxed at 12%, rather than Chapter Heading No. 9986 (Support Services to Mining), taxed at 18%.

In W.P.(T) No. 1539 of 2021, the petitioner additionally sought a mandamus to compel the Coal Company to reimburse the differential tax of 6% on the work performed, citing a discrepancy in tax classification by GST authorities. The petitioner in W.P.(T) No. 14 of 2021 operates in coal transport and related services, participating in tender processes initiated by subsidiaries of Coal India Limited, namely Bharat Coking Coal Limited (BCCL) and Northern Coalfields Limited (NCL).

In these consolidated writ applications, the petitioners seek relief on common issues related to GST classification and refund of involuntarily deposited amounts. The petitioners, in W.P.(T) No. 1539 of 2021 and W.P.(T) No. 14 of 2021, respectively, request a direction to refund Rs. 60 lakh and Rs. 47,64,900, which were deposited without demand or adjudication proceedings. They also seek a declaration that the services provided under work orders from Coal Companies should be classified under Chapter Heading No. 9965 of Tariff Rules, i.e., ‘Goods Transport Agency Services’, taxable at 12%, instead of Chapter Heading No. 9986, ‘Support Services to Mining’, which carries an 18% tax rate.

In W.P.(T) No. 1539 of 2021, an alternative prayer was made for a mandamus to reimburse the differential tax of 6% concerning the execution of work under the assumption by GST authorities that it falls under Chapter Heading No. 9986.

The petitioner in W.P.(T) No. 14 of 2021 is involved in transporting coal and related activities, participating in tenders issued by subsidiaries of Coal India Limited. Meanwhile, the petitioner in W.P.(T) No. 1539 of 2021 engages in material management and transport contracting, arguing that their services should be taxed at the lower rate applicable to Goods Transport Agency Services.

The core issue across both petitions revolves around the correct GST classification of services provided to Coal Companies and the refund of amounts involuntarily deposited under protest. The petitions highlight discrepancies in tax treatment by GST authorities and seek judicial intervention to resolve these issues in their favor.

Two writ applications were heard together due to common issues involved. The petitioners in both cases sought directions for the refund of involuntarily deposited amounts: Rs. 60 lakh in W.P.(T) No. 1539 of 2021 and Rs. 47,64,900/- in W.P.(T) No. 14 of 2021, without any prior demand or adjudication proceeding. They also sought a declaration that the works they executed under work orders from Coal Companies should be classified under Chapter Heading No. 9965 of Tariff Rules (‘Goods Transport Agency Services’) taxed at 12%, instead of Chapter Heading No. 9986 (‘Support Services to Mining’) taxed at 18%.

In W.P.(T) No. 1539 of 2021, the petitioner additionally requested a mandamus to reimburse the differential tax of 6% due to the GST authorities’ classification of the work under Chapter Heading No. 9986.

The petitioner in W.P.(T) No. 14 of 2021 is involved in coal transport and related works, participating in tenders by subsidiaries of Coal India Limited. The petitioner in W.P.(T) No. 1539 of 2021 is engaged in material management and transport contracting, similarly disputing the classification and tax rate applicable to their services.

Both petitions highlighted that after the introduction of GST, the Coal Companies issued work orders classifying their services differently than expected, leading to GST reimbursement provisions at a lower rate (12%) than what the petitioners believed was applicable (18%).

Both cases involved allegations of involuntary deposits under Section 73(5) of the CGST Act, 2017, following searches at the petitioners’ premises. The core grievance was the incorrect classification and taxation of their services by the Coal Companies post-GST implementation, prompting the petitions for refund and reclassification.

The court considered these grievances for a comprehensive decision.

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