M/S Bafna Construction A Partnership Firm vs. State Of Chhattisgarh

Facts

The petitioner, M/s Bafna Construction, a partnership firm, filed a writ petition before the High Court of Chhattisgarh at Bilaspur. The petitioner's grievance is against the inaction of the respondents, including the State of Chhattisgarh and the Union of India, in refunding the Goods and Services Tax (GST) collected from the petitioner during the execution of a contract awarded to them. The petitioner contends that the contract was awarded at pre-GST rates and that the Central Government had issued circulars providing for the refund of GST paid by contractors on contracts executed prior to or after the introduction of GST, upon production of certificates of payment. Despite repeated approaches, the petitioner claims there has been a total inaction by the respondents regarding the refund. The State counsel indicated that the claim would be decided at the earliest, subject to verification of facts and eligibility under Central Government circulars.

Held

The High Court directed 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 the facts and the petitioner's entitlement. The Court emphasized that the decision should be taken keeping in view the earlier orders of the Central Government dated 28.01.2020 and 06.06.2018, and any subsequent orders issued by the Central Government on the matter. The State Authorities were also instructed 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's copy for an appropriate decision to be taken. The writ petition was disposed of with these observations.

Key Issues

1. Whether the petitioner is entitled to a refund of GST collected on a contract awarded at pre-GST rates, in light of Central Government circulars? (Question of law) Petitioner's Arguments: The petitioner argued that the contract was awarded at pre-GST rates. They relied on Central Government circulars, specifically mentioning orders dated 28.01.2020 and 06.06.2018, which stipulate that GST paid by contractors on contracts executed before or after the GST regime would be refunded. The petitioner asserted that the respondents have failed to act on their refund claim despite repeated representations, and that similar claims have been honored by the government in other cases. Respondents' Arguments: The State counsel submitted that the claim of the petitioner would be decided at the earliest, subject to verification of facts and whether the claim falls within the purview of the Central Government's circulars and orders. No specific arguments were recorded for the Union of India.