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 officials) in refunding GST collected from the petitioner during the execution of a contract awarded to them. The contract was awarded prior to the implementation of the GST regime on July 1, 2017. The petitioner contended that the Chhattisgarh Government had issued a circular stating that GST paid on contracts executed before July 1, 2017, would be refunded upon production of certificates of GST payment. Despite repeated approaches, the petitioner alleged total inaction from the respondents regarding the refund. The State counsel submitted that the claim would be decided after verification of facts and consideration of 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 undertaken after due verification of facts and the petitioner's entitlement. The Court emphasized that an appropriate decision should be taken keeping in view the State Government's earlier order dated October 10, 2018, and all subsequent related orders. The State Authorities were also directed to consider the petitioner's contention that GST has been refunded in many similar cases. The Court set an outer limit of 90 days from the receipt of the order for the State Authorities to take an appropriate decision. The Court did not expressly leave any issue undecided, as the direction was to process and decide the claim.

Key Issues

1. Whether the petitioner is entitled to a refund of GST collected on a contract awarded prior to the GST regime, as per the State Government's circulars? (Question of law and fact, turning on the interpretation and applicability of government circulars regarding GST refunds for pre-GST contracts). Petitioner's Argument: The petitioner argued that they are entitled to a refund of GST paid on contracts awarded before July 1, 2017, based on a Chhattisgarh Government circular that mandates such refunds. They highlighted the government's inaction despite their repeated requests and pointed out that similar claims have been honored by the government. Revenue/State's Argument: 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 circulars and orders issued by the State Government concerning GST refunds for pre-GST contracts. The State did not present any specific counter-arguments against the petitioner's entitlement but sought verification.