M/S. Shree Ram Construction Company A Registered Partnership Firm vs. State Of Chhattisgarh

Facts

The petitioner, M/s. Shree Ram Construction Company, filed a writ petition before the High Court of Chhattisgarh, Bilaspur, alleging inaction by the respondents in refunding Goods and Services Tax (GST) collected during the execution of a contract. The contract was initially awarded under the GST regime with a 12% tax rate, which was subsequently increased to 18% effective July 18, 2022, during the contract's performance. The petitioner contended that despite repeated requests, the respondents had failed to process the GST refund. The respondents, through their counsel, submitted that the petitioner's claim would be decided at the earliest, subject to verification of facts.

Held

The High Court of Chhattisgarh disposed of the writ petition by directing the respondent 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 an appropriate decision should be taken within an outer limit of 90 days from the date of receiving a copy of the order. The Court also took note of the petitioner's contention that the government itself has refunded GST in similar cases across various departments, suggesting this as a factor to be considered in the decision-making process. The Court did not explicitly decide on the entitlement to the refund but directed the authorities to process the claim.

Key Issues

1. Whether the respondents have failed to act on the petitioner's claim for refund of GST collected during the execution of the contract, thereby causing inaction? (Question of fact and law) 2. Whether the petitioner is entitled to a refund of the GST amount collected, considering the increase in the tax rate during the contract period? (Question of law) The petitioner argued that the respondents have been inactive in processing their GST refund claim despite repeated representations. The petitioner also highlighted that in similar cases involving other government departments like PWD, PMGSY, NHAI, Railways, and CPWD, the government itself has refunded the GST. The respondents, through their counsel, stated that the claim would be decided promptly after verification of the facts, implying that the entitlement and factual basis of the claim would be examined.