Case Law Details
M S Ajab Singh and Co. Vs Commissioner of CGST (Delhi High Court)
The petitioner, a contractor engaged by the Delhi Jal Board (DJB), filed a writ petition challenging a Show Cause Notice dated 30 September 2025. Through the notice, the GST authorities sought recovery of differential GST of 6% on works contract services executed for the Delhi Jal Board.
The dispute concerns the applicable GST rate on works assigned by the Delhi Jal Board to private contractors, namely whether such services attract GST at 12% or 18%.
The petitioner contended that the Delhi Jal Board is a local authority, relying on a decision of the GST Department’s policy wing dated 16 November 2020. However, the GST Department’s position in other matters involving the same issue is that the Delhi Jal Board is not a local authority and, therefore, contractors are not entitled to any benefit available on that basis under Section 2(69) of the Central Goods and Services Tax Act, 2017.
The petitioner further submitted that the issue affects several contractors who have received similar notices and that GST had already been deposited at the rate of 12%.
The Delhi High Court observed that the question whether the Delhi Jal Board qualifies as a local authority is a legal issue requiring determination to avoid prolonged proceedings. Considering the nature of the dispute, the Court held that the matter deserved examination in a writ petition.
Accordingly, the Court issued notice, stayed further proceedings pursuant to the impugned Show Cause Notice, and listed the matter for hearing on 29 July 2026.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The present petition has been filed by the petitioner under Articles 226 of the Constitution of India, inter alia, challenging the impugned Show Cause Notice dated 30th September, 2025 (hereinafter, ‘impugned SCN’).
2. The petitioner in the present petition is a contractor engaged by the Delhi Jal Board for carrying out certain works. Vide the impugned SCN, the petitioner has been called upon to pay a differential Goods and Services Tax (hereinafter, ‘GST’) of 6% on works contract services executed by the petitioner for the Delhi Jal Board.
3. The question for consideration in the present petition is that whether the works assigned by the Delhi Jal Board to private contractors would attract GST at the rate of 12% or 18%.
4. The submission on behalf of the learned counsel for the petitioner is that the Delhi Jal Board is a local authority, as held by the GST Department’s policy wing decision dated 16th November, 2020.
5. The position of the GST Department in other matters relating to this same issue is that the Delhi Jal Board is not a local authority, and hence the contractor is not entitled to the benefit of the Delhi Jal Board being a local authority, in terms of Section 2(69) of the Central Goods and Services Tax Act, 2017.
6. Further, learned counsel for the petitioner submits that the issue concerned in the present petition would affect many contractors who have been issued notices by the GST Department.
7. Additionally, learned counsel for the petitioner submits that, applying the 12% rate, the GST has already been deposited by the petitioner.
8. Issue notice.
9. Mr. Akash Panwar, learned JSC, waives notice for respondents no. 1 and 2.
10. Notice be issued to the remaining respondent through all permissible modes.
11. The question raised as to whether DJB is a local authority is a legal issue which would have to be determined, so as to avoid protracted proceedings.
12. Accordingly, the same deserves consideration in a writ petition. In the meantime, proceedings in the impugned SCN are hereby stayed.
13. List on 29th July, 2026.
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