Purushottam Jairam & Company Vs State of Maharashtra (Bombay High Court)
The Bombay High Court considered a petition concerning the applicability of tax laws to timber purchased through e-auctions conducted in April and May 2017.
The petitioner had participated in e-auctions held on 17 April 2017 and 17 May 2017 for purchasing timber logs. The governing terms and conditions, issued via a circular dated 28 July 2016, required payment of 25% of the sale price along with proportionate Forest Development Tax within seven days, with a possible extension of 23 days subject to 18% interest. The remaining 75% of the price, along with applicable taxes including sales tax under the Bombay Sales Tax Act, 1959, was to be paid within 60 days, extendable by 30 days with similar interest liability.
The petitioner paid the initial 25% along with applicable taxes but failed to pay the remaining 75% within the stipulated 60-day period. Consequently, the authorities demanded payment along with interest at 18% per annum as per the auction conditions.
The petitioner argued that since the extended payment period extended beyond 1 July 2017—when the CGST Act, 2017 and MGST Act, 2017 came into force—the tax liability should be governed by the GST regime rather than the repealed earlier laws. The petitioner sought permission to pay GST instead of the taxes applicable at the time of auction and requested waiver of interest, penalty, and other charges.
