The High Court of Jharkhand has refrained to decide on the leviablity of GST for GTA Services during the investigation.
GTS Coal Sales, the petitioners prayed for a direction to refund the involuntarily deposited amount of Rs. 60 lac in W.P.(T) No. 1539 of 2021 and Rs. 47,64,900/- in W.P.(T) No. 14 of 2021 without there being any demand and/or adjudication proceeding.
A search was carried out in the office premises of the petitioner and upon threat of coercion, the petitioner involuntarily deposited an amount of Rs. 60 lakh under protest purportedly under Section 73 (5) of the Central Goods and Services Tax Act (CGST), 2017.
It was argued that the respondent- BCCL issued from time to time work orders for the execution of the work about ‘Transportation of Coal’ and after the implementation of the GST regime, both the petitioners were issued work orders wherein Respondent- Coal Company classified the said works as under ‘GTA Services’ and provisions have been made for reimbursement of the amount of GST in the said work order only to the extent of 12%.
Due to an agreement between the coal companies and the petitioners they were depositing the tax @ 12% and without any adjudicating order as per procedure enshrined under GST Act the petitioners were forced by the Tax authorities to deposit the amount mentioned above.
It was submitted that the case is still under investigation stage and even show cause notice has not been issued; as such this Court may entertain this application holding that the services rendered by the petitioners in favour of the coal companies should be classified under Chapter Heading No. 9965 of the Tariff Rules i.e. ‘Goods Transport Agency Services’, leviable to tax @ 12% as against the classification under Chapter Heading No. 9986 of the Tariff Rules being ‘Support Services to Mining’ leviable to tax @ 18%.
Justice Aparesh Kumar Singh and Justice Deepak Roshan of the court observed that at this stage any determination on the issue of leviablity of tax, whether @ of 12% or whether @ 18 % will certainly hamper the entire investigation.
The Court held that “if after investigation and subsequent proceedings, an adjudication order is passed against the respective petitioners and they are held liable to pay the tax @ 18%; then both the petitioners would be at liberty to raise their claim of the differential amount from respective Coal- companies in an appropriate proceeding before an appropriate forum which shall be decided as per law and the agreement/work orders between the parties and verification of documents.”
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