M/S Kapil Kumar Khattar Through Its ... vs Union Of India Through It Secretary on 8 April, 2025

Outcome**
The Review Petition (RP No.42/2024) filed by M/s Kapil Kumar Khattar was dismissed. The Court found no error apparent on the face of record, no discovery of new facts, nor any other sufficient reason to recall its earlier judgment dated 3rd November, 2023, which had dismissed the petitioner's writ petition (WP(C) No.1379/2021).

2. Core Issue
The core issue was whether the petitioner (a works contractor) was liable to pay the differential Goods and Services Tax (GST) amount, arising from a reduction in GST rates on works contracts from 18% to 12% after the bid submission date but before the formal notification of the reduced rates. Specifically, the petitioner sought review of an earlier judgment that upheld this liability, arguing that the applicable GST rate at the time of bid submission was already 12% or that their tender considered the impending reduction.

3. Key Facts
* Initial GST Rate: SRO-GST-11 dated 8th July, 2017, notified construction services under Heading 9954 (including composite supply of works contract under item No. 3(ii)) to be taxed at 18%.
* GST Council Recommendation: The 20th GST Council meeting on 5th August, 2017, recommended reducing GST on works contract services from 18% to 12%.
* Petitioner's Bid: The review petitioner submitted its bid on 28th August, 2017. The last date for submission of bids was 16th September, 2017.
* Formal Rate Reduction: A formal notification by the Government of Jammu & Kashmir (SRO-GST-06 (Rate)) was issued on 21st September, 2017, reducing GST rates on works contracts from 18% to 12%.
* Work Allotment: Works were allotted and commenced after 21st September, 2017.
* Demand Notice: The respondent (Garrison Engineer) issued letters dated 16th June, 2021, calling upon the petitioner and other contractors to deposit the differential tax amount.
* Prior Judgments:
* A Division Bench in WP(C) No.2183/2019 (M/s Pardeep Electricals and Builders Private Limited) dated 23rd December, 2020, found the recovery notices violated natural justice but affirmed the liability to pay the tax.
* The same issue was re-agitated in WP(C) No.170/2021 (Pardeep Electricals) and dismissed on 3rd November, 2023, reiterating that GST Council recommendations are not statutory notifications.
* The petitioner's original writ petition (WP(C) No.1379/2021) was also dismissed on 3rd November, 2023, based on the judgment in WP(C) No.170/2021.
* Contractual Condition: Special Condition No.49 of the tender document stated that tendered rates would be inclusive of all taxes prevailing on the last due date for receipt of tenders. It also provided for reimbursement to the contractor for any increase in tax rates and refund/deduction by the Government for any decrease.

4. Arguments
* Taxpayer (M/s Kapil Kumar Khattar):
* The work order was issued after 21st September, 2017, when the GST rate had already been reduced to 12%.
* Special Condition No.49 of the tender document was against statutory provisions of the GST Act, particularly Section 13 (time of supply).
* SRO-GST-06 dated 21st September, 2017, did not reduce GST on all works contracts. Instead, SRO-GST-2(Rate) dated 22nd August, 2017, already notified 12% for composite supply of works contracts as defined in Section 2(119) of CGST Act when supplied to Government/local authority for specific works (e.g., historical monuments, canals, pipelines). Therefore, the petitioner's bid considered the 12% rate prevailing at the time, and it was not a case of reduction from 18% to 12%.
* Revenue (Union of India):
* All issues raised by the review petitioner had already been conclusively decided by previous judgments of the Court (WP(C) No.2183/2019 and WP(C) No.170/2021).
* There was no error apparent on the face of the record, nor any discovery of new facts or law to warrant a review.
* The review petition was an attempt to re-litigate a settled matter.

5. Court’s Reasoning
* No Grounds for Review: The Court found no error apparent on the face of record, no discovery of new facts, or any other sufficient reason to exercise its review jurisdiction.
* Binding Nature of Contract: The Special Condition No.49 of the tender document explicitly stated that the quoted rates were inclusive of taxes prevailing on the last date for receipt of tenders. It also clearly provided for reciprocal adjustment (reimbursement for increase, refund/deduction for decrease) based on rates prevailing on that date. This condition was not challenged by the petitioner at any point.
* GST Rate on Bid Submission Date: Indisputably, on the last date for receipt of tenders (16th September, 2017), the statutory GST rate on works contracts was 18% under SRO-GST-11 dated 8th July, 2017.
* GST Council Recommendations vs. Statutory Notification: GST Council recommendations are not statutory and do not have the force of law until formally notified. The reduction to 12% was formally notified only on 21st September, 2017. This point was already elaborated upon and decided in the earlier judgment (WP(C) No.170/2021).
* Applicability of CGST Act Provisions: The Court held that arguments based on Sections 13 and 14 of the CGST Act (time of supply, change in rates) did not assist the petitioner, especially given the clear contractual terms in Special Condition No.49.
* Interpretation of SRO-GST-2(Rate) dated 22nd August, 2017: The Court clarified that SRO-GST-11 dated 8th July, 2017, taxed general construction services (including composite supply of works contract under item 3(ii)) at 18%. SRO-GST-2(Rate) dated 22nd August, 2017, only brought changes for specific types of works contracts supplied to Government/local authorities for certain specified works (e.g., historical monuments, canals, pipelines, railways, low-cost housing), which were originally classified under item No. 3(iii) of SRO-GST-11. It did not alter the 18% rate for the general composite supply of works contract (item No. 3(ii) of SRO-GST-11). Therefore, the prevailing rate for the petitioner's contract on the bid submission date was indeed 18%, which subsequently reduced to 12% on 21st September, 2017.
* New Argument: The argument regarding SRO-GST-2(Rate) dated 22nd August, 2017, was raised for the first time in the review petition and was not specifically pleaded in the original writ petition.

6. Statutory References
* SRO-GST-11 dated 8th July, 2017 (Government of Jammu & Kashmir)
* SRO-GST-06 (Rate) dated 21st September, 2017 (Government of Jammu & Kashmir)
* SRO-GST-2(Rate) dated 22nd August, 2017 (Government of Jammu & Kashmir)
* Central Goods and Services Tax Act, 2017 (CGST Act, 2017)
* Section 2, Clause 119 (Definition of "composite supply of works contract")
* Section 13 (Time of supply of services)
* Section 14 (Change in rate of tax in respect of supply of goods or services)
* Article 265 of the Constitution of India (No tax save by authority of law)

7. Precedents Cited
* M/s Pardeep Electricals and Builders Private Limited v. Union of India and others, WP(C) No.2183/2019, decided on 23rd December, 2020.
* M/s Pardeep Electricals and Builders Private Limited v. Union of India and others, WP(C) No.170/2021, decided on 3rd November, 2023.
* M/s Kapil Kumar Khattar v. Union of India and others, WP(C) No.1379/2021, decided on 3rd November, 2023 (the judgment under review).