M/S Vinod Kumar Jain Having Its Registered Office At College Road Jashpur Nagar vs. State Of Chhattisgarh

Facts

The petitioner, M/s Vinod Kumar Jain, a contractor, filed a writ petition before the High Court of Chhattisgarh at Bilaspur. The petitioner's grievance was the inaction of the respondents, various authorities of the Public Works Department of Chhattisgarh, in refunding the Goods and Services Tax (GST) collected from the petitioner during the execution of a contract. The petitioner contended that the contract was awarded at pre-GST rates, and the GST regime came into force on July 1, 2017. The State Government had issued a circular promising refunds for GST paid on contracts affected by the GST regime, provided contractors produced certificates of payment. Despite repeated approaches, the petitioner alleged a total lack of action from the respondents regarding the refund.

Held

The Court acknowledged the petitioner's grievance regarding the inaction of the State authorities in refunding the GST collected. The State counsel indicated that the claim would be processed after verification of facts and assessment of its eligibility under the relevant government circulars and orders. The Court, considering the facts and circumstances, disposed of the writ petition with a direction to the State Authorities to immediately process the petitioner's claim for GST refund. This processing is to be done after due verification of facts and the petitioner's entitlement. The Court emphasized that an appropriate decision should be taken within 90 days from the receipt of the order, keeping in mind the State Government's earlier order dated October 10, 2018, subsequent orders, and the fact that the government itself has refunded GST in similar cases. The ratio decidendi is that government authorities must act expeditiously on refund claims based on their own circulars and policies, especially when similar claims have been settled.

Key Issues

1. Whether the petitioner is entitled to a refund of GST paid on a contract awarded at pre-GST rates, in light of the Chhattisgarh Government's circular dated October 10, 2018, and subsequent orders? The petitioner argued that the contract was awarded with pre-GST rates, and the GST law came into force from July 1, 2017. They relied on a Government of Chhattisgarh circular that stated contractors who paid GST on contracts affected by the GST regime would be refunded upon producing payment certificates. The petitioner asserted that despite their repeated approaches, the respondents have failed to act on their refund claim. The State counsel submitted that the claim would be decided at the earliest, subject to verification of facts and whether the claim falls within the scope of the State Government's circulars and orders concerning GST refunds for pre-GST rate contracts.