M/S Sanjay Singhi vs. Union On INDIA

Held

The Court disposed of the writ petition by directing the petitioner to submit a fresh claim to the respondent authorities, supported by cogent and substantial documents, detailing the GST payments made during the execution of the contract. The respondent authorities are directed to consider and scrutinize this fresh application immediately upon receipt and take an appropriate decision in accordance with the law within 90 days from the date of receiving the application. The Court acknowledged the petitioner's submission of Annexure P/7 and their willingness to file a fresh claim. The Court did not make a definitive finding on the entitlement to reimbursement but facilitated a process for its consideration.

Facts

The petitioner, M/s Sanjay Singhi, was awarded a contract on May 9, 2018, for maintenance and periodic renewal of rural roads under the Pradhan Mantri Gram Sadak Yojna in Rajnandgaon district. The contract was initially under the old tax regime, where no service tax was payable. Following the introduction of the Goods and Services Tax (GST) regime in 2017, the petitioner became liable to pay GST. The petitioner contends that the quoted price was exclusive of service tax, and as per the contract, any 'New Tax' introduced should be reimbursed by the Executive Engineer upon submission of proof. The petitioner paid 12% GST, which later increased to 18%. Despite representations, the respondents did not reimburse the tax liability. The petitioner filed a writ petition seeking directions for reimbursement of the GST paid.

Key Issues

1. Whether the petitioner is entitled to reimbursement of GST paid on services provided under the contract, considering the contract terms regarding 'New Tax' introduction? The petitioner argued that the contract price was not inclusive of service tax and that Clause 12 of the contract stipulated reimbursement of any 'New Tax' introduced after the contract execution. They submitted that GST was a 'New Tax' and thus, the respondents were liable to reimburse the additional tax burden incurred by the petitioner. The petitioner relied on the contract terms and their submission of proof of payment. The respondents, represented by the State counsel, submitted that if the petitioner could produce proof of the additional tax liability suffered due to GST paid during the contract completion, the claim would be scrutinized and processed in accordance with the governing policy.