M/S Yana Associates vs. State Of Chhattisgarh

Facts

The petitioner, M/s Yana Associates, was awarded a contract for water supply infrastructure work prior to July 1, 2017. Upon the implementation of GST on July 1, 2017, the petitioner was initially made to pay 18% GST, which was later reduced to 12%. The petitioner claims to have paid GST on this contract and seeks the release of the amount paid along with interest. The petitioner has made repeated representations to the respondent authorities but has not received a response. The petitioner relies on two circulars from the Government of Chhattisgarh, dated October 10, 2018, and December 21, 2017, concerning the refund of tax levied on account of subsequent tax impositions.

Held

The Court held that the stage for invoking the arbitration clause had not arisen. This was based on the fact that the respondents had not disputed or rejected the petitioner's claim for refund of GST. The Court considered the two circulars relied upon by the petitioner, dated October 10, 2018, and December 21, 2017, as significant. The Court directed respondents No. 2 to 5 to take a decision on the petitioner's claim/representation for the refund of GST at the earliest, preferably within 60 days from the presentation of a certified copy of the order. The petitioner would then be at liberty to pursue appropriate remedies based on the decision of the respondents. The Court did not expressly leave any issue undecided, but the final decision on the refund itself is contingent on the respondents' action.

Key Issues

1. Whether the petitioner is entitled to a refund of GST paid on a contract awarded prior to the implementation of GST, along with interest, based on the circulars issued by the State Government? 2. Whether the existence of an arbitration clause in the contract bars the petitioner from approaching the High Court through a writ petition for the release of GST refund? Petitioner's Arguments: The petitioner contends that they are entitled to a refund of GST paid on the contract, supported by circulars dated October 10, 2018, and December 21, 2017, issued by the Government of Chhattisgarh. They argue that despite repeated representations, the respondent authorities have not addressed their claim. They assert that the stage for invoking the arbitration clause has not arisen as their claim has not been disputed or rejected by the respondents. Respondents' Arguments: The State counsel argues that the contract contains an arbitration clause, and therefore, the petitioner should avail the remedy of arbitration instead of filing a writ petition. They submit that the writ petition is not sustainable as the petitioner has not pursued the arbitration remedy.