Deduction of GST on Work Contracts Held Valid: Petition Dismissed as Infructuous

Case Title: Swapan Kumar Gogoi v. State of Assam & Ors.
Court: Gauhati High Court
Petition No.: WP(C) 7492/2019
Date of Judgment: 26.09.2024
Category of Dispute: Applicability of GST on pre-GST contracts / TDS deduction under GST
Relevant Sections: Sections 12, 13 & Schedule II Clause 6(a) of CGST/SGST Act, 2017; Section 64A Sale of Goods Act, 1930; Circular No.3/2017-GST dated 24.08.2017

Facts of the Case (with Para References)

• The petitioner participated in a tender for construction of wholesale fish markets in Assam and was awarded the Goalpara project at Rs. 2.32 crore (Para 2).

• Tender was floated under the VAT regime (Assam VAT Act, 2003). First bill was deducted under VAT law. However, second and third running bills were deducted under SGST/CGST Act, 2017 (Para 2–3).

• Petitioner argued that since NIT was issued under VAT Act, subsequent deductions under GST regime were unjustified (Para 3).

• Petitioner relied upon decision in WP(C) 4201/2020 (decided 21.11.2023) which clarified that deductions depend on whether invoices were raised before or after GST implementation (Para 4).

Questions in Consideration (Dispute)

1. Whether deductions from petitioner’s second and third running bills under SGST/CGST were valid when the contract was awarded under VAT regime? (Para 3).

2. Whether Circular No.3/2017-GST dated 24.08.2017 and Sections 12, 13 of CGST/SGST Act support deduction under GST for invoices raised post 01.07.2017? (Para 4).

Observation of the Court

• The Court referred to WP(C) 4201/2020 holding that:

  • If invoices raised before 01.07.2017 → VAT deduction applies.

  • If invoices raised post 01.07.2017 → GST deduction applies.

  • Works partly executed before but invoiced after 01.07.2017 fall under GST regime (Para 4).

• The State deducted only 1% CGST and 1% SGST, not 12% as alleged by petitioner (Para 6).

• Hence, deductions were in line with law and Circular No.3/2017-GST (Para 7).

Judgment of the Court

• The writ petition was dismissed as infructuous since deductions under GST were valid and no infirmity was found in State’s action (Para 7–8).

• Petitioner may submit representation if claiming concession under Section 64A of Sale of Goods Act, 1930 (Para 5, 7).

Between Fine Lines (Simple 5-Line Summary)

• Contractor awarded work under VAT regime, later bills fell under GST regime.

• First bill deducted under VAT; subsequent bills deducted under GST.

• Court cited earlier ruling that deductions depend on invoice date, not tender date.

• State correctly deducted 1% CGST + 1% SGST on later bills.

• Petition dismissed as infructuous; petitioner free to seek relief under Sale of Goods Act.

Summary of Referred Cases

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