M/S Ncc LTD (Formerly Nagarjuna Construction Company LTD) Through Piyush Kumar Gupta vs. State Of Jharkhand Through The Deptt Of Energy

Held

The Court held that the petitioner-firms are entitled to reimbursement of the GST component paid on indirect transactions. The Court reasoned that the State and its instrumentalities must demonstrate fair play in action, as observed by the Supreme Court in ABL International Ltd. The petitioners had been agitating for this refund for a long time, and JBVNL's response that the matter was pending litigation was insufficient. The Court found the facts to be similar to the case of M/s Techno Electric and Engineering Company Limited, noting that the NITs, GCCs, LOAs, and GST clauses were the same. The Court emphasized that the date of NIT floating or LOA/Agreement execution should not be a basis for denying the benefit of the amended Clause 10.7 of the GCC, especially if the GST regime was introduced during the performance of the contract. The Court found JBVNL's stand to be violative of justice, equity, and fair play. Therefore, the Court directed JBVNL to calculate and reimburse the petitioner-firms the GST component paid by them and release any withheld amounts from their bills, along with statutory interest as per the GST Act, 2017. The entire exercise was to be completed within six weeks, with responsibility to be fixed for any delay causing further liability.

Facts

The petitioners, including M/s Sri Gopikrishna Infrastructure Pvt. Ltd., M/s NCC Ltd., and M/s Anvil Cables Private Limited, are contractors who entered into agreements with Jharkhand Bijli Vitran Nigam Limited (JBVNL) for various projects. These agreements were executed both before and after the introduction of the Goods and Services Tax (GST). The petitioners sought reimbursement of GST paid on indirect transactions, citing an amendment to Clause 10.7 of the General Conditions of Contract (GCC) and Clause 28 of the GCC, which they contended allowed for such reimbursement. JBVNL, however, denied reimbursement, stating that the matter was pending litigation and that the amended clauses were not applicable to contracts executed pre-GST. The petitioners argued that JBVNL's stance was unfair and discriminatory, especially since the nature of the work was the same and the GST regime was introduced during the performance of some contracts.

Key Issues

1. Whether the petitioner-firms are entitled to reimbursement of the GST component paid on indirect transactions, particularly when the contracts were awarded pre-GST regime, in light of the amended Clause 10.7 of the GCC and Clause 28 of the GCC? (Question of law) Petitioner's Arguments: - The petitioners argued that the amendment to Clause 10.7 of the GCC clearly intended for GST paid on indirect transactions to be reimbursed. They relied on circulars dated September 18, 2018, and April 27, 2021, to support this interpretation. - They contended that JBVNL is bound by the amended GCC and cannot selectively deny benefits to contractors awarded contracts pre-GST. - They cited decisions from the High Court of Karnataka (Chandra Se Kariya & Ors.), Patna High Court (Jai Bhawani Construction), and their own High Court (M/s Sai Sai Krishna Constructions) to support the principle that GST paid by contractors on indirect transactions is reimbursable, aligning with the judgment in "M/s Techno Electric and Engineering Company Limited." - They argued that denying this benefit violates principles of justice, equity, and fair play, especially when the GST regime was introduced during the contract performance. Respondents' Arguments: - The respondents (JBVNL) contended that the amended clauses were not applicable to petitioner-firms awarded contracts pre-GST regime, as the matter was pending litigation. - They took the stand that the pre-bid clarification leading to the amendment and subsequent incorporation of Clause 28 in the GCC would not be available to these petitioner-firms.