D. Sureshbabu Vs Kerala State Electricity Board Ltd. (Kerala High Court)
The Kerala High Court considered a writ petition filed by an A Class Government contractor who had undertaken three civil works for the Kerala State Electricity Board under work orders dated 31.5.2017, 3.8.2017, and 30.8.2018. Although one work order was issued before the introduction of the Goods and Services Tax (GST) regime, the petitioner contended that the actual commencement of that work was on 25.8.2017. All three works were completed after the introduction of GST on 1.7.2017.
The petitioner contended that, following the implementation of GST, all works executed were governed by the GST regime and that no liability could remain for Kerala Value Added Tax (KVAT) or other State taxes. According to the petitioner, after completion of the works and submission of the contract bills, the respondents illegally recovered amounts corresponding to KVAT while also recovering GST, resulting in double taxation. The petitioner challenged Ext.P9 on the ground that it was illegal and arbitrary.
The respondents filed a counter affidavit stating that the settlement of bills and release of payments had been carried out strictly in accordance with the GST regime and that no amounts had been recovered towards VAT work contract tax or Service Tax. Relying on Ext.R1(a), they submitted that the contract rates quoted by the petitioner were inclusive of all taxes and duties under Clause 11.4. According to the respondents, the quoted tax components included 4% work contract tax and 3% Service Tax. Since the bills were settled after GST came into force, these earlier tax components were not separately payable. Instead, GST at 18% was added over and above the admissible contract value because the liability to remit GST rested with the contractor. The respondents therefore maintained that the petitioner could not simultaneously claim work contract tax, Service Tax, and GST.
