Ganpati Infra Civil PVT. LTD. (Spv). vs. Bilaspur Smart City Limited

Held

The Court found that the ground on which the petitioner's earlier representation was rejected (lack of supporting documents) was a valid reason for reconsideration. The Court noted that Clause C of the agreement specifically deals with situations where there is a change in indirect tax laws, including GST law, and provides for the benefit to be passed over. The Court observed that the petitioner's claim was based on a change in the GST regime pursuant to a GST Council decision. Therefore, the Court deemed it appropriate to permit the petitioner to submit a fresh representation with all supporting documents. The respondents were directed to consider and decide this fresh representation without prejudice to their earlier decision, at the earliest, and preferably within four months of its receipt. The Court did not decide on the merits of the claim itself but allowed for a proper procedural reconsideration.

Facts

The petitioner, Ganpati Infra Civil Pvt. Ltd. (SPV), entered into a contract with Bilaspur Smart City Limited (BSCL) on April 28, 2021, for road construction. Following the contract, the GST rate increased from the rate existing at the time of contract to 18%. The petitioner claimed entitlement to the difference in GST amount, citing Clause C of the contract regarding changes in indirect taxes. The petitioner made several representations to BSCL. BSCL rejected the initial representation on April 11, 2023, stating it lacked supporting documents. A subsequent representation was rejected on May 19, 2023, on the ground that no escalation clause was applicable to the existing contract. The petitioner contended that the GST Council's decision is a public document and that BSCL is liable to incorporate such changes as per the contract.

Key Issues

1. Whether the petitioner is entitled to the difference in GST amount due to an increase in the tax rate after the contract was entered into, as per Clause C of the contract concerning changes in indirect taxes. Petitioner's arguments: The petitioner argued that Clause C of the contract mandates that any change in indirect taxes, including GST, should result in the benefit being passed over to the other party. They contended that the decision of the GST Council is a public document and that BSCL is liable to incorporate such changes. The petitioner also stated they would provide supporting documents and requested a direction for BSCL to reconsider their claim. Revenue/State's arguments: The respondents (BSCL) rejected the petitioner's claim on the grounds that the initial representation lacked supporting documents and that no escalation clause was applicable to the existing contract. The judgment does not record any further arguments from the respondents.