A.K. Constructions vs. State Of Chhattisgarh

Facts

The petitioner, A.K. Constructions, through its partner Rakesh Agrawal, filed a writ petition before the High Court of Chhattisgarh at Bilaspur. The petitioner's grievance was the inaction of the respondents (State of Chhattisgarh and its departments) in refunding GST collected from the petitioner during the execution of a contract awarded prior to the GST regime (July 1, 2017). The petitioner claimed that the Chhattisgarh Government had issued a circular allowing refunds for GST paid on contracts executed before July 1, 2017, upon production of certificates of payment. Despite repeated approaches, the petitioner alleged no action was taken by the respondents regarding the refund. The State counsel indicated that the claim would be decided after verification of facts and eligibility under the relevant government circulars.

Held

The Court disposed of the writ petition by directing the State Authorities to immediately process the petitioner's claim for the refund of GST. This processing is to be done after due verification of the facts and the petitioner's entitlement. The Court emphasized that the decision should consider the State Government's order dated October 10, 2018, and all subsequent related orders. The Court also noted the petitioner's contention that similar GST refunds have been granted by the government in other cases. The State Authorities were given an outer limit of 90 days from the receipt of the order to take an appropriate decision. The Court did not delve into the merits of the petitioner's claim but directed prompt action on it.

Key Issues

1. Whether the petitioner is entitled to a refund of GST collected on a contract executed prior to the GST regime, as per the Chhattisgarh Government's circulars? (Question of law and fact, turning on the interpretation of government circulars and the applicability of GST to pre-GST contracts). Petitioner's contention: The petitioner argued that they are entitled to a refund of GST paid on a contract awarded before July 1, 2017, based on a Chhattisgarh Government circular that mandates such refunds upon proof of payment. They highlighted the inaction of the respondents despite their repeated requests and pointed out that similar claims have been settled by the government. Revenue/State's contention: The State counsel submitted that the petitioner's claim would be considered subject to verification of facts and whether the claim falls within the scope of the government's circulars and orders concerning refunds for pre-GST contracts. The State did not dispute the existence of the circular but emphasized the need for verification.