Rajinder Kumar Gupta Sole Proprietor Of ... vs Union Of India Through It Secretary on 8 April, 2025

Outcome**
The review petition was dismissed, finding no merit in the grounds raised by the petitioner for recalling the original judgment dated 3rd November, 2023.

2. Core Issue
The core issue was whether the judgment dated 3rd November, 2023, dismissing the petitioner's challenge to the recovery of differential GST amount, suffered from any error apparent on the face of the record or warranted review due to discovery of new facts or other sufficient reasons. Specifically, it concerned the applicable GST rate for works contracts tendered in August 2017 and the validity of a contractual condition regarding tax rate changes.

3. Key Facts
* Petitioner: Rajinder Kumar Gupta, Sole Proprietor of M/s Rajinder Kumar Contractors.
* Original Judgment: The review petition sought to recall the High Court's judgment dated 3rd November, 2023, in WP(C) No.934/2021.
* Initial GST Rate: Vide SRO-GST-11 dated 8th July, 2017, construction services under Heading 9954 were notified to be taxed at 9% (implying 18% CGST+SGST).
* GST Council Recommendation: In its 20th meeting on 5th August, 2017, the GST Council recommended reducing the GST rate on Works Contract Services from 18% to 12%.
* Tender Submission: The petitioner submitted his tender on 28th August, 2017, after the GST Council recommendation. The last date for bid submission was 1st September, 2017.
* Formal Notification: The Government of Jammu & Kashmir formally notified the reduced GST rate of 12% via SRO-GST-06 (Rate) on 21st September, 2017.
* Bid Acceptance: The petitioner's bid was accepted on 22nd September, 2017.
* Demand for Differential Tax: Respondent No.6 issued a letter dated 6th April, 2021, demanding the petitioner deposit a differential tax amount of Rs.22,79,020 (representing the difference between 18% and 12% GST) by 30th April, 2021.
* Previous Litigation:
* WP(C) No.2183/2019 (M/s Pardeep Electricals and Builders Private Limited) disposed of on 23rd December, 2020, found the GST rate on the last bid submission date was 18% and later reduced to 12%. It clarified that the liability to pay tax was not disputed, only the quantum.
* WP(C) No.170/2021 (M/s Pardeep Electricals and Builders Private Limited) decided on 3rd November, 2023, rejected the argument that GST Council recommendations were immediately binding, upholding that the statutory notification on 21st September, 2017, was the effective date.
* The petitioner's WP(C) No.934/2021 was dismissed on 3rd November, 2023, in light of the judgment in WP(C) No.170/2021.
* Contractual Condition: Special Condition 49 of the tender document stipulated that rates quoted by the contractor were inclusive of all taxes prevailing on the last due date for receipt of tenders, with provisions for reimbursement or deduction for any subsequent increase or decrease in tax rates.

4. Arguments (Taxpayer vs Revenue)
* Taxpayer (Rajinder Kumar Gupta):
* The work allotment order was issued after 21st September, 2017, when the reduced 12% GST rate was already in effect.
* Special Condition 49 of the tender document was "in the teeth of" statutory provisions of the CGST Act, 2017, particularly Section 13 (time of supply), and should have been ignored.
* Bids were submitted considering the GST Council's recommendation of 5th August, 2017, reducing the rate to 12%, thus the demand for differential tax was incorrect.
* (New argument raised for the first time in review) SRO-GST-06 dated 21st September, 2017, did not reduce the GST on works contracts; instead, works contracts were already governed by SRO-GST-02 (Rate) dated 22nd August, 2017, which had set the rate at 12%. Therefore, no reduction occurred that would authorize recovery of a differential amount. Specifically, the contract fell under S.No.3 of the 22nd August, 2017 notification for specific government works, attracting 12%.
* Revenue (Union of India):
* All issues raised in the review petition had already been comprehensively addressed and settled by the previous judgments in WP(C) No.2183/2019 (23.12.2020) and WP(C) No.170/2021 (03.11.2023), which fully covered the petitioner's case.
* There was no error apparent on the face of the record, nor any discovery of new facts, to justify the exercise of review jurisdiction.
* The review petition was merely an attempt to re-litigate a concluded judgment on previously argued grounds.

5. Court’s Reasoning
* Review Scope: The Court reiterated that its review jurisdiction could only be exercised for errors apparent on the face of the record, discovery of new facts, or other sufficient reasons, none of which were demonstrated by the petitioner.
* Contractual Obligation (Special Condition 49): The Court emphasized the binding nature of Special Condition 49, which clearly stated that quoted rates included taxes prevailing on the last due date for receipt of tenders. It explicitly provided for reciprocal adjustment (reimbursement for increases, refund/deduction for decreases) if tax rates changed after that date. The petitioner, as a contracting party, was bound by this condition, and had not challenged its validity previously.
* Applicable GST Rate on Bid Date: On the last date for tender receipt (1st September, 2017), the prevailing GST rate for the composite supply of works contract was 18% as per SRO-GST-11 dated 8th July, 2017 (specifically item No.3(ii) of Heading 9954).
* GST Council Recommendations vs. Statutory Notification: The Court affirmed its earlier ruling that GST Council recommendations are merely advisory and do not become legally binding or effectuate new tax rates until formally notified by statutory instruments, consistent with Article 265 of the Constitution. The statutory reduction to 12% occurred only on 21st September, 2017.
* Analysis of SRO-GST-2(Rate) dated 22nd August, 2017 (New Argument):
* The Court meticulously examined the petitioner's new argument.
* It clarified that SRO-GST-2(Rate) dated 22nd August, 2017, did not change the 18% rate applicable to the general category of "composite supply of works contract" (under item No.3(ii) of SRO-GST-11 dated 8th July, 2017).
* Instead, the 22nd August, 2017 notification made changes only to specific types of construction services (e.g., those for historical monuments, canals, pipelines) which fell under item No.3(iii) of the 8th July, 2017 notification (dealing with "construction services other than (i) and (ii) above").
* Therefore, the 18% rate for the petitioner's type of composite supply of works contract remained unchanged until the 21st September, 2017 notification reduced it to 12%.
* Conclusion: The Court found no error in its previous judgment, and the petitioner's arguments lacked merit.

6. Statutory References
* Acts:
* Central Goods and Services Tax Act, 2017 (CGST Act, 2017)
* Section 2(119) (definition of 'composite supply of works contract')
* Section 13 (time of supply of services)
* Section 14 (effect of change in rate of tax on supply of services)
* Constitution of India:
* Article 265
* Notifications/SROs:
* SRO-GST-11 dated 8th July, 2017 (Jammu & Kashmir Government)
* SRO-GST-06 (Rate) dated 21st September, 2017 (Jammu & Kashmir Government)
* SRO-GST-02 (Rate) dated 22nd August, 2017 (Jammu & Kashmir Government)
* GST Council:
* 20th GST Council meeting (5th August, 2017)
* Other:
* Heading 9954 (Construction services)

7. Precedents Cited
* Rajinder Kumar Gupta v. Union of India and others, WP(C) No.934/2021 (Judgment dated 3rd November, 2023) - This is the judgment under review.
* M/s Pardeep Electricals and Builders Private Limited, WP(C) No.2183/2019 (Judgment dated 23rd December, 2020)
* M/s Pardeep Electricals and Builders Private Limited, WP(C) No.170/2021 (Judgment dated 3rd November, 2023)