Cg Associates vs. State Of Chhattisgarh

Held

The Court disposed of the writ petition with directions to the Respondent Authorities to consider and decide the representation filed by the Petitioner on November 6, 2022, at the earliest, preferably within 90 days. While deciding the representation, the Respondent Authorities were directed to take into consideration the Order dated September 30, 2022, whereby Clause 2.17.1 was amended. The Petitioner was also granted liberty to make a fresh representation with supporting documents proving the additional tax liability. Subject to a favorable decision on the representation, the Respondents were directed to take steps for reimbursing the amount forthwith. The Court did not make a final determination on the merits of the reimbursement claim but remanded the matter for decision by the authorities.

Facts

The Petitioner, CG Associates, a partnership firm, filed a writ petition before the Chhattisgarh High Court challenging the additional tax liability incurred towards GST. The Petitioner was awarded a work order on April 25, 2022, when the GST rate was 12 percent. Subsequently, from July 18, 2022, the GST rate was enhanced to 18 percent, leading to an additional liability for the Petitioner. The Petitioner contended that the Department, by amending Clause 2.17.1 of the contract terms on September 30, 2022, acknowledged that any new tax or levy imposed after the last stipulated date for tender receipt would be reimbursed by the Engineer-in-Charge upon submission of proof of payment. The Petitioner had made a representation to the Respondents on November 6, 2022, regarding this issue, but no decision had been taken.

Key Issues

1. Whether the Petitioner is entitled to reimbursement of the additional GST liability incurred due to the increase in the GST rate from 12 percent to 18 percent, in light of the amended Clause 2.17.1 of the contract terms dated September 30, 2022? (Question of mixed law and fact, concerning contract interpretation and statutory levies). Petitioner's Contention: The Petitioner argued that the amendment to Clause 2.17.1 on September 30, 2022, clearly stipulated that any increase in tax rates after the tender submission date would be reimbursed by the Engineer-in-Charge upon proof of payment. They contended that this principle should apply to the increased GST liability, requiring the Respondents to reimburse them for the additional tax paid. They relied on the amended contract terms. Respondents' Contention: The learned State Counsel did not oppose the limited prayer of the Petitioner but submitted that the representation must be decided strictly in accordance with the provisions of law and the governing contract.