M/S Yana Associates vs. State Of Chhattisgarh

Facts

The petitioner, M/s Yana Associates, filed a writ petition seeking the release of tax paid under the GST law along with interest. The petitioner had secured a contract for civil works and pipe laying 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 repeatedly approached the concerned authorities for a refund of the excess tax paid but received no response. The State counsel argued that the contract contained an arbitration clause, making the writ petition unsustainable as the petitioner had not availed this remedy.

Held

The Court held that the writ petition was maintainable at this juncture. It reasoned that the stage for invoking the arbitration clause had not yet arisen because the respondents had neither disputed nor denied the petitioner's claim by passing any specific order. The Court considered the two circulars relied upon by the petitioner, dated October 10, 2018, and December 21, 2017, as significant. Given that the petitioner's claim was pending and had not been formally rejected, the Court directed respondents No. 2 to 5 to decide on the petitioner's claim for the refund of GST. This decision was to be made at the earliest, preferably within 60 days of the petitioner presenting a certified copy of the order. The petitioner would then be at liberty to pursue further remedies based on the decision of the respondents. No specific issue was left undecided.

Key Issues

1. Whether the writ petition is maintainable in light of the arbitration clause present in the contract between the petitioner and the respondents? (Question of law) 2. Whether the petitioner is entitled to a refund of GST paid on a contract awarded prior to the GST regime, considering the existence of relevant government circulars? (Question of mixed law and fact) Petitioner's arguments: The petitioner contended that the GST law came into force after the contract was awarded, leading to an incorrect levy of GST. They relied on two circulars dated October 10, 2018, and December 21, 2017, issued by the Government of Chhattisgarh, which purportedly provide for the refund of tax levied in such circumstances. The petitioner asserted that their repeated representations to the authorities have not been addressed, and thus, the stage for invoking arbitration had not yet arisen. Respondents' arguments: The State counsel argued that the presence of an arbitration clause in the contract barred the petitioner from approaching the High Court through a writ petition, and the petitioner should have pursued the arbitration remedy.