MAS Constructions Vs Hubballi Dharwad Smart City Limited (Karnataka High Court)
The petitioner, MAS Constructions, sought an appropriate writ directing Hubballi Dharwad Smart City Limited to reimburse GST of Rs.42,01,582/- and sought interest on the tax dues at 18% per annum, referring to the statutory interest rate under Section 50 of the CGST Act, 2017. The petitioner had been awarded contracts pursuant to tenders invited by the respondent authority. According to the petitioner, the rates finalised under the bid documents included sales tax at 5%. The tender and work orders were allotted on 07.12.2018 and 29.12.2018, after the coming into force of the Central Goods and Services Tax Act, 2017.
The petitioner submitted that it had made the applicable GST payments as a statutory requirement. The unpaid GST component comprised Rs.15,42,727/- relating to renovation of the swimming pool and operation for the period from 14.07.2019 to 30.11.2019 and Rs.26,58,856/- relating to rehabilitation of MG Park for the period from 31.07.2019 to 04.08.2020, aggregating to Rs.42,01,582/-.
The petitioner had made representations dated 01.08.2019 and 27.02.2020 requesting release of the GST amount. The respondent authority sought clarification from the Karnataka Urban Infrastructure Development and Finance Corporation (KUIDFC) by letter dated 06.12.2019 as to whether GST was required to be made good to the contractor when only 5% of VAT had been provided for in the contract.
