Ms Triveni Engicon PVT LTD Through Its Authorized Signatory Uttam Kumar Mallick vs. The State Of Jharkhand Through Its Chief Secretary

Held

The Court held that the matter requires reconsideration at the level of the concerned respondent No. 3 or a competent authority. The Court directed that the respondent No. 3/competent authority shall consider the petitioner's claim in accordance with law, taking into account all relevant documents, including the provisions of the Sale of Goods Act, 1930, relied upon by the petitioner, and supporting documents. This reconsideration is to be completed within 12 weeks from the date of receipt of the order or a representation from the petitioner. The Court did not explicitly decide on the applicability of Section 64A of the Sale of Goods Act or the interpretation of Clause 15 of the SOP, but rather remanded the matter for a fresh consideration by the appropriate authority.

Facts

The petitioner, M/s. Triveni Engicon Pvt. Ltd., sought reimbursement of differential Goods and Services Tax (GST) on a subsisting contract awarded in 2013 for earth work and lining. The GST regime came into effect on July 1, 2017. The petitioner's claim for reimbursement was rejected by respondent No. 6 through letters dated December 27, 2021, and January 11, 2022. The petitioner argued that the contract value implicitly included tax benefits from the pre-GST regime and sought reimbursement at the 12% GST rate. The rejection occurred before the issuance of a Standard Operating Procedure (SOP) by the Commercial Taxes Department, Government of Jharkhand, on August 26, 2022. The respondents indicated readiness to reconsider the grievance in light of the SOP.

Key Issues

1. Whether the petitioner is entitled to reimbursement of differential GST on a subsisting contract entered into before the GST regime, considering the contract's tax clause and the provisions of the Sale of Goods Act, 1930? Petitioner's Arguments: The petitioner contended that Clause 45 of the agreement, stating that rates quoted are inclusive of taxes, should be interpreted in conjunction with Section 64A of the Sale of Goods Act, 1930. They argued that Section 64A mandates the addition or deduction of taxes imposed or decreased after the contract's making, implying a right to reimbursement for increased taxes like GST. They also argued that Clause 15 of the SOP, which states no revision of contractual value should be considered if there's no explicit clause for tax rate revision, should not preclude their claim, as the statutory provision (Section 64A) implicitly allows for such adjustments. Respondents' Arguments: The respondents submitted that the claim was initially rejected before the SOP was issued and that the petitioner's claim could now be considered in light of the SOP. They did not dispute the potential application of the Sale of Goods Act but submitted that the matter should be left to the concerned respondent-authorities for decision in accordance with the law.