M/S Ajeet Singh And Company vs. Municipal Corporation Korba

Facts

The petitioner, M/s Ajeet Singh And Company, through its sole proprietor Shri Ajeet Kumar Singh, filed a writ petition before the Chhattisgarh High Court. The petitioner's grievance was the inaction of the respondents, Municipal Corporation Korba and its Commissioner, in refunding the Goods and Services Tax (GST) collected from the petitioner during the execution of a contract awarded prior to the GST regime (effective from 01.07.2017). The petitioner relied on a circular issued by the Government of Chhattisgarh stating that GST paid on contracts executed before the GST regime would be refunded upon production of certificates of payment. Despite repeated approaches, the respondents had not processed the refund. The respondents indicated that the claim would be decided after verification of facts and its eligibility under the State Government's circulars.

Held

The Court held that the respondents have failed to act upon the petitioner's claim for refund of GST paid on a contract executed prior to the GST regime. The Court directed the respondent authorities to immediately process the petitioner's claim for the refund of GST. This processing is to be done after due verification of facts and the petitioner's entitlement. The Court emphasized that the decision should be taken keeping in view the State Government's earlier order dated 21.12.2017 and the petitioner's contention that similar refunds have been processed by other government departments. The Court set an outer limit of 90 days from the receipt of the order for the authorities to take an appropriate decision. The ratio decidendi is that inaction by authorities in processing legitimate refund claims, especially when supported by government circulars and precedents from other departments, warrants judicial intervention to ensure timely redressal.

Key Issues

1. Whether the respondents have failed to act upon the petitioner's claim for refund of GST paid on a contract executed prior to the GST regime, thereby violating the petitioner's right to seek redressal. (Question of law) 2. Whether the petitioner is entitled to a refund of GST collected on a contract awarded and executed before the commencement of the GST regime, in light of the Chhattisgarh Government's circular dated 21.12.2017. Petitioner's Contentions: The petitioner argued that the respondents have been inactive in processing their refund claim. They relied on the Chhattisgarh Government's circular which mandates refund of GST paid on pre-GST contracts. The petitioner also pointed out that similar refunds have been granted by other government departments like PWD and PMGSY for comparable cases. Respondents' Contentions: The respondents stated that the petitioner's claim would be decided at the earliest, subject to verification of facts and whether the claim falls within the scope of the State Government's circulars and orders concerning refunds for pre-GST contracts.