TRIPURA HIGH COURT ISSUES ORDER ON SRI NIMAI KAR V/S THE STATE OF TRIPURA AND ORS.

AGARTALA, India, May 27 -- Tripura High Court issued the following order/judgement on April 27:

1. Heard Mr. Somik Deb, learned Senior Counsel assisted by Mr. Jishan Samed, counsel appearing for the petitioner and Mr. Dipankar Sarma, Addl. Government Advocate appearing for the State respondents.

2. A tender notice dt.20.03.2017 was issued by the Executive Engineer, Public Works Department (PWD, for short) of the Government of Tripura for execution of a works contract namely "Improvement of Manu to Kanchanpur Road (L-35.00 Km)/SH:-Formation in widening, metalling, carpeting including protection wall and drainage work Job No.TP/ COM/ 114/2016-17".

3. The petitioner participated in the said tender and emerged successful.

4. At the time of quoting the rates for the said tender, the petitioner had kept in mind the tax payable @ 6% of the gross value on such works contracts under the Tripura Value Added Tax Act, 2004 (TVAT Act, for short) regime.

5. Under Section 4(3) of the said Act, levy of VAT was permitted on works contract providing that in respect of such transfer, only so much value of goods involved in the works contract which has been paid to the dealer during the period, shall be taken into account for determining the turnover for the said period. The said provision also provided for deduction of tax at source in matters relatable to works contract at such rates as may be prescribed under the Rules framed under the said Act.

6. Rule 7(1) of the Tripura Value Added Tax Rules (TVAT Rules, for short) provided for deduction of VAT at source in connection with the bills, payable under the works contract.

7. The TVAT Act, 2004 came to be repealed w.e.f. 01.07.2017 by the promulgation of the Tripura State Goods and Services Tax Act, 2017 (TSGST Act, for short) and the Central Goods and Services Tax Act, 2017 (CGST Act, for short).

8. Consequent upon such repeal, VAT which was payable @ 6% in connection with works contract from the gross bills of the contractor, stood enhanced to 12% under the TSGST and CGST Acts.

9. After coming into force of the CGST Act,2017 and the TSGST Act,2017, the petitioner addressed a letter dt.04.11.2017 informing the respondents that he would not be able to execute the work at the previously quoted rates and that he would not bear the liability of any increase in the rate of tax. This letter was written by the petitioner prior to the issuance of any work order and/or execution of any agreement in furtherance of the offer made by him.

10. In reply thereto, the Additional Chief Engineer, Planning, PWD(R&B), Government of Tripura made a communication dt.23.11.2017 to the Superintending Engineer, 5th Circle, PWD(R&B), Government of Tripura noting that the Supply Advisory Board/Work Advisory Board had approved the prayer of the petitioner as tendered by him in his letter dt.04.11.2017.

*Rest of the document can be viewed at: (https://hcservices.ecourts.gov.in/ecourtindiaHC/cases/display_pdf.php?filename=bzPoyUlszYLCUcCpirIpqBVsBaVHq7Vr2vnPywNWPpgd6IKGSabo1WkSP%2B495gr6&caseno=WP(C)/167/2024&cCode=1&cino=TRHC010003002024&state_code=20&appFlag=)

Disclaimer: Curated by HT Syndication.