M/S Rakesh Pratap Singh Chauhan vs. State Of U.P. And 3 Others

Facts

The petitioner, M/s Rakesh Pratap Singh Chauhan, was awarded construction work contracts by the Public Works Department of the State of Uttar Pradesh. Initially, GST was not applicable to these contracts. However, GST became a requirement during the currency of the contracts. A Government Order dated 9.11.2017 was issued, providing for the payment of GST to contractors. The petitioner alleges that the respondents paid the applicable GST on the completed contract work and deposited these amounts. The petitioner's grievance is that GST is also payable on the Defect Liability Period of the contract, and the State is not considering this claim, despite the State being liable to pay GST on it. Aggrieved by this, the petitioner approached the High Court.

Held

The Court did not decide the substantive issue of whether GST was payable on the Defect Liability Period or the State's liability to pay it. Instead, considering the nature of the grievance, the Court directed respondent no.2 to examine the petitioner's claim concerning the release of GST amount on the Defect Liability Period. The Court ordered that an appropriate decision be taken in accordance with the applicable Government Order within two months of presenting a certified copy of the order. Any amount found payable as a result of this determination is to be released within a further period of four weeks thereafter. The Court's decision is procedural, remitting the matter for examination and decision by the concerned authority.

Key Issues

1. Whether the petitioner is entitled to claim GST on the Defect Liability Period of the construction contract awarded by the Public Works Department, and if so, whether the State is liable to pay such GST. The petitioner argued that GST is payable on the Defect Liability Period of the contract, and the State, having undertaken the contract, is liable to pay this GST. The petitioner's claim is based on the principle that services rendered during the Defect Liability Period are part of the original contract and thus subject to GST. The respondent State Counsel contended that the nature of the claim raised by the petitioner can be more appropriately examined by respondent no.2 (an unspecified authority). The State did not present any detailed arguments on the merits of the GST liability for the Defect Liability Period but suggested an alternative forum for examination.