Review Petition Dismissed: GST Rate Determined by Notification, Not Council Recommendation

Case Details:
Case Title: M/s Kapil Kumar Khattar v. Union of India & Ors.
Court: High Court of Jammu & Kashmir and Ladakh at Jammu
Petition Number: RP No.42/2024
Relevant Sections: Section 13, Section 14, and Clause 119 of Section 2 of CGST Act, 2017
Category of Dispute: Rate of GST / Works Contract / Contractual Terms
Date of Judgment: 08 April 2025
Relevant GST Notifications: SRO-GST-11 dated 08.07.2017, SRO-GST-2 (Rate) dated 22.08.2017, and SRO-GST-6 (Rate) dated 21.09.2017

Facts of the Case (¶1–¶5)

• The petitioner submitted a bid for a works contract on 28.08.2017, relying on the GST Council’s recommendation (05.08.2017) to reduce GST from 18% to 12%, though the actual notification effecting this change was issued later on 21.09.2017. (¶3)

• The bid was accepted, work commenced post notification, and subsequently, a letter demanding differential GST was issued by the Respondents on 16.06.2021. (¶3)

• A similar issue raised by M/s Pardeep Electricals had already been decided earlier by this Court in WP(C) No.2183/2019, holding that recovery notices without a hearing violated natural justice but confirmed tax liability based on the rate applicable on bid date. (¶4)

• The petitioner’s earlier writ (WP(C) No.1379/2021) was dismissed on 03.11.2023 in line with the judgment in WP(C) No.170/2021. The current petition seeks review of that decision. (¶4–5)

Question(s) in Consideration (¶5–¶6)

• Whether the petitioner is liable to pay GST at 18% based on the rate applicable on the bid submission date, despite the later notification reducing the rate to 12%.

• Whether Special Condition No.49 of the tender, which fixes GST rate as on the bid date, is contrary to Section 13 of CGST Act.

• Whether the review petition raises any “error apparent on the face of record” or any “new fact” warranting reconsideration.

Observations of the Court (¶7–¶17)

• No new facts or errors were found in the earlier judgment; review jurisdiction cannot be used to revisit concluded issues. (¶7)

• Clause 49 of the contract clearly binds the contractor to GST rate as applicable on the bid’s last date and stipulates reimbursement/refund only in case of post-bid rate changes. (¶8–¶9)

• Since the rate on 16.09.2017 (last date for bids) was 18%, the petitioner cannot claim 12% based on a future notification. (¶10)

• GST Council’s recommendation does not equate to enforceable law; tax can be levied only via notification as per Article 265 of the Constitution. (¶10)

• Argument based on SRO-GST-2 (Rate) dated 22.08.2017 was found to be inapplicable to the nature of petitioner’s works contract, which did not fall under specific government works listed therein. (¶13–¶16)

• The petitioner neither challenged the validity of Clause 49 earlier nor showed that it violated any statutory provision. (¶11–¶12)

Judgment of the Court (¶18)

• The Review Petition is dismissed, having found no merit or error in the earlier judgment dated 03.11.2023.

Between Fine Lines (Simplified Summary)

1. GST Council’s recommendation isn’t law until notified.

2. GST rate applicable on bid date (18%) binds the contractor.

3. Contract clause 49 legally ties parties to tax rates as on bid submission date.

4. Notification dated 21.09.2017 is not retrospectively applicable.

5. Review was rejected as it raised no new facts or legal grounds.

Summary of Referred Cases