A.K. Construction vs. State Of Chhattisgarh

Facts

The petitioner, A.K. Construction, represented by its partner Rakesh Agrawal, filed a writ petition before the Chhattisgarh High Court. The petitioner's grievance was the inaction of the respondent State authorities in refunding GST collected from them during the execution of a contract awarded prior to the implementation of the GST regime on July 1, 2017. The petitioner contended that the Government of Chhattisgarh had issued a circular promising refunds for GST paid on contracts executed before the GST regime, provided contractors produced certificates of GST 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 its alignment with relevant government circulars.

Held

The High Court disposed of the writ petition by directing the State Authorities to immediately process the petitioner's claim for GST refund. The Court emphasized that the processing should include due verification of facts and the petitioner's entitlement. The decision should be taken keeping in view the State Government's earlier order dated October 10, 2018, and any subsequent relevant orders. The Court also noted the petitioner's contention that GST refunds have been granted in similar 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 expressly leave any issue undecided, but the core of the decision was to expedite the processing of the refund claim.

Key Issues

1. Whether the petitioner is entitled to a refund of GST paid on a contract executed prior to July 1, 2017, in light of the Chhattisgarh Government's circulars? Petitioner's Arguments: The petitioner argued that the contract was awarded before the GST regime came into force. They relied on a circular issued by the Government of Chhattisgarh which stipulated that GST paid by contractors on pre-GST regime contracts would be refunded upon submission of certificates of GST payment. The petitioner asserted that despite their repeated attempts to secure the refund, the State authorities have remained inactive. They also pointed out that in similar cases, the government has already refunded GST. Respondent's Arguments: The State counsel submitted that the claim of the petitioner 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 the refund of GST for contracts awarded prior to July 1, 2017.