JS Enterprises Vs The State of Karnataka

The petitioners, acting as auction purchasers of scrap or intending bidders, have brought their grievances before the court through these petitions. They present several prayers seeking redressal for their concerns. These petitions likely outline the issues faced by the petitioners in their auction purchases or bidding intentions, potentially related to procedural irregularities, contractual disputes, or other legal challenges. The prayers within the petitions likely seek various forms of relief, such as clarification of rights, enforcement of contractual obligations, or remedies for any alleged injustices or breaches of legal standards. The petitioners are seeking the court’s intervention to address their grievances and provide a fair resolution to the matters at hand.

The petitioners, who are auction purchasers of scrap or intending bidders, have filed petitions with the court, seeking relief. They are represented by Mr. M.N. Shankare Gowda, who argues that the Controller of Stores & Purchase, KSRTC (the 1st Respondent), issued a Tender Notice (Annexure-A) for E-auction of old and junk buses of the KSRTC, with the auction scheduled to commence on 11.09.2017. The petitioners raise concerns about this process.

The petitioners, who are auction purchasers or intending bidders for scrap, have brought their concerns before the Court through these petitions. They assert that the Controller of Stores & Purchase, KSRTC, issued a Tender Notice for the E-auction of old and junk buses of the KSRTC starting from September 11, 2017. Their primary contention revolves around the grievance that the Notice inviting tenders (NIT) for the scrap buses fails to specify the applicable Goods and Services Tax (GST) rates, which were newly introduced in India from July 1, 2017. The Notice merely states the GST rate as “As applicable /28.0” in Col.No.4 of Annexure-A.

The petitioners, who are prospective buyers or bidders interested in acquiring scrap materials from the Karnataka State Road Transport Corporation (KSRTC), have filed petitions seeking relief from the court. Their primary concern revolves around the tender notice issued by the Controller of Stores & Purchase, KSRTC, inviting bids for the e-auction of old and junk buses. The notice, dated September 11, 2017, included a provision regarding the Goods and Services Tax (GST) rates applicable to the auctioned items. The petitioners argue that the GST rate of 28% mentioned in the notice is inappropriate for scrap buses, which are not roadworthy and can only be auctioned after being certified as unfit for road use by the relevant Regional Transport Office (RTO) authorities.

According to the petitioners’ counsel, Mr. M.N. Shankare Gowda, under the new GST regime implemented from July 1, 2017, scrap buses deemed unsuitable for road use should not attract the higher GST rate. Instead, they should be subject to the lower rate of 18% as per Schedule III Heading No. 7204 of the Central GST Act, 2017 and the Karnataka Goods and Services Tax Act, 2017. Alternatively, they argue that scrap buses could fall under Residuary Entry No. 453 of Schedule III, which covers goods not specified elsewhere, thus warranting the same lower GST rate.

The petitioners seek court intervention to direct KSRTC to apply the appropriate GST rate, thereby enabling fair competition among bidders and ensuring that they can accurately factor in the tax implications when submitting their bids. By doing so, they aim to level the playing field and ensure that the auction process is conducted in accordance with the prevailing tax laws.

The petitioners, who are potential bidders or purchasers at auctions held by the Karnataka State Road Transport Corporation (KSRTC) for old and scrap buses, have brought their grievances before the court. They argue that the tender notice issued by the Controller of Stores & Purchase, KSRTC, for e-auctioning these buses contains a provision regarding the Goods and Services Tax (GST) rate applicable to the transactions. The notice states the GST rate as “As applicable /28.0”, indicating a 28% rate. However, the petitioners contend that such a high rate of GST is not appropriate for scrap buses, which are unfit for normal road use and can only be sold after certification by relevant authorities as scrap. They argue that under the new GST regime introduced in India from July 1, 2017, scrap items like these buses should be subject to a lower GST rate, specifically 18% as per Schedule-III Heading No.7204 or under Residuary Entry No.453 of the Karnataka Goods and Services Tax Act, 2017.

The petitioners assert that the KSRTC has wrongly notified the GST rate as 28%, giving them a competitive disadvantage in bidding. They highlight that other states, such as Gujarat, have issued e-tender notices for similar items with the GST rate set at 18%, supporting their argument for a lower tax rate. Additionally, they point out that the Authority for Advance Ruling, which could provide clarity on such tax disputes under the new GST laws, has not yet been constituted as required by Section 96 of the GST Acts.

In summary, the petitioners seek the court’s intervention to direct the KSRTC to apply the appropriate GST rate of 18% for scrap buses, aligning with the provisions of the GST Acts and ensuring a fair bidding process.

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