M/S Sanjay Singhi vs. Union Of INDIA

Facts

The petitioner, M/s Sanjay Singhi, filed a writ petition before the High Court of Chhattisgarh challenging the applicability of amended Notification No. 03/2022 Central Tax (Rate) dated July 13, 2022, which prescribed an 18% GST rate for works contract services. The petitioner argued that this notification should not apply to contracts executed prior to July 18, 2022, including several specific agreements listed in the petition. The petitioner sought a refund or reimbursement of the additional financial liability incurred due to the retrospective imposition of the enhanced GST rate. During arguments, the petitioner stated they were only pressing for relief related to the refund/reimbursement of additional financial liability and not other reliefs. The petitioner contended that initially 12% GST was applicable, but it was enhanced to 18%, and as per Clause 7.2 of the tender documents, they are entitled to a refund of the enhanced rate. They also noted that other departments of the State had already issued directions for similar claims. The petitioner had submitted a representation which remained undecided.

Held

The High Court, without entering into the merits of the petitioner's claim regarding the applicability of the amended notification and the entitlement to a refund, disposed of the writ petition. The Court permitted the petitioner to submit a detailed representation before respondents No. 4 to 7 (Executive Engineer, Superintending Engineer, Chief Engineer, and Engineer-in-Chief of the Public Works Department). The Court directed that in the event of such a representation being submitted, the concerned authorities shall consider and decide it strictly in accordance with the law and expeditiously, preferably within eight weeks from the date of receipt. The decision should take into account the circular dated July 13, 2022, issued by the Government of India and Clause 7.2 of the tender documents. The Court did not decide on the substantive claim of the petitioner regarding the retrospective applicability of the GST notification or the refund amount.

Key Issues

1. Whether Notification No. 03/2022 Central Tax (Rate) dated July 13, 2022, prescribing an 18% GST rate for works contract services, is applicable to contracts executed prior to July 18, 2022, specifically concerning the petitioner's agreements. Petitioner's arguments: The petitioner contended that the amended notification should not be applied retrospectively to contracts that were already executed before its effective date. They relied on Clause 7.2 of the tender documents, which they believed entitled them to a refund of the increased GST rate. They also pointed out that other government departments had issued favorable directions in similar cases. Revenue/State's arguments: The State counsel stated they had no objection to the petition being disposed of by directing the consideration of the petitioner's representation, as the petitioner was not pressing the petition on merits. However, they noted that a copy of the representation was not on record.