M/S. Ashok Khandelwal vs. C.G. State Warehousing Corporation

Facts

The petitioner, M/s. Ashok Khandelwal, a partner of which is Shri Parag Doshi, filed a writ petition before the High Court of Chhattisgarh, Bilaspur. The petitioner's grievance was the inaction of the respondents (C.G. State Warehousing Corporation and its officials) in refunding the Goods and Services Tax (GST) collected from the petitioner during the execution of a contract. The contract was 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. Despite repeated attempts by the petitioner to seek a refund, the respondents had not taken any action. The respondents' counsel indicated that the claim would be decided after verification of facts.

Held

The High Court of Chhattisgarh, Bilaspur, 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 took note of the petitioner's contention that in similar cases involving other government departments, the government itself had refunded the GST. The Court mandated that an appropriate decision be taken within an outer limit of 90 days from the date of receipt of the order. The principle established is that government bodies should expeditiously process GST refund claims of contractors, especially when there is a precedent of refunds in similar cases across other departments, and that such claims should be decided within a stipulated timeframe.

Key Issues

1. Whether the respondents are obligated to refund the GST collected from the petitioner during the execution of the works contract, considering the increase in the GST rate from 12% to 18%. Petitioner's arguments: The petitioner contended that the respondents had failed to refund the GST collected from them. They highlighted that in similar cases involving other government departments such as PWD, PMGSY, NHAI, Railways, and CPWD, the government itself had refunded the GST. This implies a precedent or established practice for such refunds. Respondents' arguments: The respondents submitted that the claim of the petitioner would be decided subject to the verification of facts. They did not dispute the petitioner's claim outright but sought time and process for verification.