M/S Yana Associates vs. State Of Chhattisgarh

Facts

The petitioner, M/s Yana Associates, entered into a contract for water supply scheme works 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 entitlement to a refund of the tax paid, citing circulars from the Chhattisgarh Government. Despite repeated approaches to the concerned authorities, the petitioner's claim for refund has not been addressed. The State counsel argued that the contract contained an arbitration clause, suggesting arbitration as the appropriate remedy. However, the Court noted that the claim had not been denied or rejected by the respondents, thus the arbitration clause had not yet been invoked.

Held

The Court held that the petitioner's claim for refund of GST was supported by the circulars dated October 10, 2018, and December 21, 2017. It was also noted that the respondents had not denied or disputed the petitioner's claim by passing any order or rejecting it. Therefore, the Court found that the stage for invoking the arbitration clause had not yet arisen. The Court directed respondents No. 2 to 5 to decide on the petitioner's claim/representation for the refund of GST at the earliest, preferably within 60 days of the certified copy of the order being presented. The petitioner would then be at liberty to pursue appropriate remedies based on the decision passed by the respondents. The Court did not expressly leave any issue undecided.

Key Issues

1. Whether the petitioner is entitled to a refund of GST paid on a contract awarded prior to July 1, 2017, based on subsequent circulars issued by the State Government? (Question of law) 2. Whether the existence of an arbitration clause in the contract bars the petitioner from approaching the High Court by way of a writ petition for the refund of GST, when the claim has not been formally rejected by the respondents? (Question of mixed law and fact) Petitioner's contentions: The petitioner argued that they are entitled to a refund of GST paid on the contract, referencing circulars dated October 10, 2018, and December 21, 2017, issued by the Public Works Department and Town Administration and Development Department of the Government of Chhattisgarh, respectively. They further contended that their repeated representations to the authorities have not been responded to, and therefore, the stage for invoking the arbitration clause has not arisen. Revenue/State's contentions: The State counsel argued that the contract contains an arbitration clause, and the petitioner should avail this remedy to resolve the dispute. They submitted that since the petitioner has not pursued arbitration, the writ petition is not maintainable.