Subham Infrastructure vs. Union Of INDIA

Facts

The petitioner, Subham Infrastructure, entered into a contract with South East Central Railway (SECR) on April 8, 2019, for railway work. The work was completed on September 10, 2021. The petitioner sought reimbursement of GST at 18% instead of the initially applied 12%, citing a revision in GST rates and a Railway Board letter. The petitioner submitted a supplementary GST bill on November 2, 2023, after the date of completion. The department initially informed the petitioner that records were misplaced and later stated they were being reconstructed. Subsequently, the petitioner was informed that bills preferred more than six months after the date of completion were blocked in the IPAS portal, preventing payment. The petitioner argued that the delay in submission was due to the department misplacing the file, which was acknowledged by the department. The petitioner filed a writ petition seeking to set aside the impugned letter dated May 24, 2024, and directing payment of the GST difference along with EMD, SD, and PG with interest.

Held

The Court disposed of the writ petition with an observation that the respondent shall clear all the dues of the petitioner within a period of 90 days from the date of receipt of the order. The Court did not explicitly rule on the entitlement to the GST difference or other dues in isolation but directed the clearance of all dues. The reasoning implicitly acknowledges the petitioner's grievance regarding the delay and the department's role, leading to the directive for timely payment. The ratio decidendi is that despite procedural delays and technicalities, the State has a duty to clear legitimate dues of contractors within a reasonable timeframe, especially when the delay is partly attributable to the department's own administrative issues. The operative direction is for the respondents to clear all dues within 90 days.

Key Issues

1. Whether the petitioner is entitled to the reimbursement of the GST difference amount (12% to 18%) and other dues (EMD, SD, PG) despite the delay in submitting the supplementary GST bill beyond six months from the date of completion, considering the department's acknowledgement of misplacing records. The petitioner argued that the delay in submitting the GST reimbursement bill was solely attributable to the respondent department misplacing the relevant records, a fact that the department itself acknowledged. Therefore, the petitioner contended that the department should not be allowed to take a technical plea of delay to withhold legitimate dues. The petitioner relied on the principle that public agencies/states should not withhold lawful dues of private agencies on grounds of delay and should avoid technical pleas when dealing with legitimate claims. The respondents argued that the GST reimbursement bill was submitted belatedly on November 2, 2023, which is more than six months after the date of completion (September 10, 2021). This delay prevented the bill from being processed through the IPAS system. They stated that they initiated a note for obtaining approval from the competent authority (PFA/SECR) for passing the bill, and payment would be made upon approval and availability of funds. The respondents asserted that the petitioner was responsible for the delay in submitting the bill.