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

Held

The Court disposed of the writ petition with a direction for the petitioner to submit a fresh claim to the respondent authorities, supported by cogent documents evidencing the GST payment during the execution of the contract. The respondent authorities are directed to process and scrutinize this fresh claim immediately upon receipt 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 at this stage, deferring the decision pending the submission and scrutiny of the fresh claim and supporting documents. The Court's decision is based on the agreement between the parties for the petitioner to resubmit their claim and the respondents' undertaking to process it.

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 rendered under contracts awarded by the respondents for construction and maintenance of rural roads. The contracts were initially awarded under the old tax regime where service tax was not applicable. Following the introduction of GST, the petitioner became liable to pay GST, which they contend was not included in their quoted prices. The contract terms stipulated reimbursement of any 'New Tax' introduced upon submission of proof. The petitioner had previously submitted a representation dated 19.10.2019, which remained pending. The petitioner agreed to submit a fresh claim with supporting documents.

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, as per the contract terms regarding 'New Tax'. (Question of law and fact, turning on the interpretation of contract clauses and the GST regime). Petitioner's contention: The petitioner argued that the contract price was not inclusive of service tax, and as per the contract clause for 'New Tax', the respondents are liable to reimburse the additional tax liability incurred due to the introduction of GST. They relied on the contract terms and their prior representation. Respondents' contention: The State submitted that if the petitioner could produce proof of additional tax liability incurred for GST paid during contract completion, the claim would be scrutinized and processed in accordance with the governing policy.