Sri Ayyappan Constructions VS Chief Engineer, Chennai

Mr. G. Surya Narayanan, the learned counsel on record for the writ petitioner, Mr. R.P. Prathap Singh, the learned Government Advocate who accepts notice on behalf of respondents 1 to 3, and Ms. Hema Muralikrishnan, the learned Senior Standing Counsel who accepts notice on behalf of respondent No. 4, are all present before the Court.

With the consent of all the aforementioned learned counsels, the main writ petition is taken up, heard, and is now being disposed of.

Both the learned counsel for the writ petitioner and the learned Government Advocate for respondents 1 to 3 agree without any dispute that the matter at hand is directly and clearly covered by a common order dated 01.08.2019 made by this Court.

Mr. G. Surya Narayanan, the learned counsel on record for the writ petitioner Mr. R.P. Prathap Singh, and the learned Government Advocate, Mr. R.P. Prathap Singh, on behalf of respondents 1 to 3, along with Ms. Hema Muralikrishnan, the learned Senior Standing Counsel for respondent No. 4, are present before the Court.

With the consent of all the aforementioned learned counsel, the main writ petition is taken up, heard, and being disposed of.

The matter at hand concerns a contract between the second respondent, the Salem City Municipal Corporation, and the writ petitioner company. This contract, dated 23.01.2015, pertains to providing an underground Sewerage system (Collection System) to Salem Corporation – Package III (Zone III) for the balance work.

It is mutually agreed, without dispute or disagreement, by the learned counsel for the writ petitioner and the learned Government Advocate for respondents 1 to 3, that this matter is directly addressed by a common order dated 01.08.2019, specifically in Paragraphs 3 to 22 of the said order. These paragraphs are pertinent and are reproduced below:

“Subject matter of instant writ petitions is a contract between the second respondent the Salem City Municipal Corporation and the writ petitioner company. The contract is dated 23.01.2015 and this Court is informed that the contract is for providing under ground Sewerage system (Collection System) to Salem Corporation – Package III (Zone III) (balance work).

In the light of the submissions made at the bar today and in the light of what unfurled in the hearing, the writ petitions now turn on an extremely narrow compass.

Subject matter of the instant writ petitions is payment of ‘Goods and Service Tax’ (‘GST’ for brevity) under ‘Central Goods and Services Tax Act, 2017’ (‘CGST Act’ for brevity).

There is no disputation or disagreement before this Court that GST regime became operational on and from 01.07.2017. As mentioned supra, the contract which forms subject matter of these two writ petitions is dated 23.01.2015, which is prior to the GST regime. Therefore, the contract does not provide for payment of GST.

This Court is informed that work under the said contract is now under way.

When the work was under way, the GST regime became operational. The second respondent (Salem City Municipal Corporation) passed a resolution dated 22.01.2018 requesting the writ petitioner company to furnish the ‘GST registration number’ so as to enable the second respondent to effect the payment towards GST. Pursuant to the resolution, the writ petitioner company furnished its ‘GST registration number’. However, the second respondent, by its letter dated 13.04.2018, called upon the writ petitioner company to furnish a certificate to the effect that the ‘GST’ is not applicable to the contract. It is the grievance of the writ petitioner that the said requirement is wholly unnecessary and unwarranted.”

After considering the arguments and submissions from both sides, the Court finds that the matter indeed falls within the scope of the aforementioned order from 01.08.2019. The contract in question, being dated before the GST regime came into effect, does not include provisions for GST payment. However, when the work was in progress, the GST regime was implemented, leading to requests and communications between the parties regarding the applicability of GST to the contract.

In light of the above, and with no new contentions raised, the Court, with the consent of all parties involved, proceeds to dispose of the main writ petition based on the principles and conclusions set forth in the earlier order from 01.08.2019.

Mr. G. Surya Narayanan, the learned counsel on record for the writ petitioner Mr. R.P. Prathap Singh, the learned Government Advocate representing respondents 1 to 3, and Ms. Hema Muralikrishnan, the learned Senior Standing Counsel representing respondent No. 4, are present before the Court.

With the consent of all the aforementioned learned counsels, the main writ petition is taken up, heard, and being disposed of.

The matter at hand pertains to a contract between the Salem City Municipal Corporation (second respondent) and the writ petitioner company, dated 23.01.2015. The contract involves providing an underground sewerage system (Collection System) to Salem Corporation – Package III (Zone III) for the balance work.

Both the learned counsel for the writ petitioner and the learned Government Advocate for respondents 1 to 3 agree, without dispute, that this matter is directly addressed by a common order dated 01.08.2019 issued by this Court. Paragraphs 3 to 22 of the said order are pertinent and are reproduced as follows:

1. The subject of the writ petitions revolves around the payment of Goods and Service Tax (GST) under the Central Goods and Services Tax Act, 2017 (CGST Act).

2. It is not in dispute that the GST regime came into effect on 01.07.2017. The contract in question, dated 23.01.2015, predates the GST regime and does not account for the payment of GST.

3. The work under the contract is currently in progress.

4. During the course of the work, the GST regime became operational on 01.07.2017. Subsequently, on 11.07.2018, the writ petitioner wrote to the second respondent (Salem City Municipal Corporation) regarding the liability to pay GST.

5. In response, the second respondent, through a communication dated 10.08.2018, referenced as No.Na.Ka No.38631/2014/SS1, informed the writ petitioner that GST payable is 1% under State GST and 1% under Central GST, totaling 2%. Accordingly, the second respondent stated that they would be deducting 2% at the time of making payments under the contract.

6. It is agreed that 2% tax is being deducted at source (TDS) by the second respondent.

In light of these facts, the writ petition stands resolved, as it is evident from the 2019 order that the contract does not account for GST payments, and the deduction of 2% TDS by the second respondent aligns with the communication provided to the writ petitioner. Therefore, the writ petition is disposed of in accordance with the previous order of the Court.

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