M/S B.M.S Projects vs. State Of Chhattisgarh

Held

The Court disposed of the writ petition by directing the petitioner to submit a fresh claim to the respondent authorities, supported by cogent documents evidencing the GST payments made during the execution of the contract. The respondent authorities were directed to process and scrutinize this fresh claim and take an appropriate decision within 90 days from the date of receipt. The Court did not make a definitive finding on the entitlement to reimbursement but facilitated a procedural path for the petitioner to pursue their claim. The core issue of whether the contract clause for 'New Tax' reimbursement applied to GST was not definitively decided on merits but was to be examined by the authorities upon submission of fresh documentation.

Facts

The petitioner, M/s B.M.S. Projects, a partnership firm, filed a writ petition seeking reimbursement of Goods and Services Tax (GST) paid on services provided under contracts for construction and maintenance of rural roads awarded by respondent departments. The contracts were initially awarded under the old tax regime where no service tax was payable. Following the introduction of GST in 2017, the petitioner became liable to pay GST. The petitioner contended that the quoted prices were exclusive of service tax and that a contract clause stipulated reimbursement of any 'New Tax' introduced. Despite submitting representations, the petitioner's claim for reimbursement remained unaddressed, leading to the filing of the writ petition.

Key Issues

1. Whether the petitioner is entitled to reimbursement of GST paid on services provided under contracts awarded prior to the introduction of GST, based on the contract terms stipulating reimbursement of 'New Tax'? (Question of law and fact, concerning interpretation of contract clauses and the impact of GST legislation). Petitioner's arguments: The petitioner argued that the contract price was exclusive of service tax and that a specific clause in the contract obligated the Executive Engineer to reimburse any 'New Tax' introduced. They stated that GST was a 'New Tax' introduced after the contract execution, and therefore, the respondents were liable to reimburse the GST paid, which was initially 12% and later increased to 18%. They relied on the contract terms for their claim. Revenue/State's arguments: The State submitted that if the petitioner could produce proof of additional tax liability incurred for GST paid during the contract completion, the claim would be scrutinized and processed in accordance with the governing policy.