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. Following 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 they are entitled to a refund of the tax paid, citing two Chhattisgarh Government circulars dated October 10, 2018, and December 21, 2017, which allegedly provide for refunds of tax levied on account of subsequent tax impositions. The petitioner has repeatedly approached the respondent authorities for release of the tax amount along with interest but has not received a response.

Held

The Court held that the stage for invoking the arbitration clause had not yet arisen. This was based on the fact that the respondents had not disputed or denied the petitioner's claim by passing any order. The Court considered the two circulars relied upon by the petitioner (dated October 10, 2018, and December 21, 2017) and the petitioner's pending representations. The Court directed respondents No. 2 to 5 to decide on the petitioner's claim for a GST refund within 60 days of receiving 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 was deferred to the respondents.

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 the circulars issued by the Chhattisgarh Government? (Question of law) Petitioner's argument: The petitioner contends that they are entitled to a refund of the GST paid, supported by circulars from the State Government (Public Works Department dated October 10, 2018, and Town Administration and Development Department dated December 21, 2017). They argue that their repeated representations to the authorities have not been addressed. Revenue/State's argument: The State counsel argues that the contract contains an arbitration clause, and therefore, the petitioner should pursue their remedy through arbitration rather than a writ petition. They assert that since the petitioner has not invoked the arbitration clause, the writ petition is not maintainable at this stage.