Gayatri Ventures vs. State Of Chhattisgarh

Held

The Court disposed of the writ petition by directing the respondent authorities to consider and decide the representation filed by the petitioner on 07.11.2022 at the earliest, preferably within 90 days. While deciding the representation, the respondent authorities were directed to take into consideration the order dated 30.09.2022, 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 incurred. The Court further directed that subject to the representation being decided favorably, the respondents shall take steps for reimbursing the amount forthwith. The Court did not decide the substantive issue of reimbursement on merits but remanded it for consideration by the authorities.

Facts

The petitioner, Gayatri Ventures, a partnership firm, was awarded a work order on 06.05.2022. Initially, the GST payable was 12%. However, the GST rate was subsequently enhanced to 18% effective from 18.07.2022, leading to an additional tax liability for the petitioner. The Water Resources Department, on 30.09.2022, amended clause 2.17.1 of the contract terms. This amended clause stipulated that any new tax or levy imposed after the tender receipt date would be treated as a new tax, and the Engineer in Charge would reimburse the contractor for such new taxes upon proof of payment. The petitioner argued that the same principle should apply to the increased GST rate, entitling them to reimbursement. The petitioner had filed a representation dated 07.11.2022 to the respondent authorities regarding this issue, which was yet to be decided.

Key Issues

1. Whether the petitioner is entitled to reimbursement for the additional GST liability incurred due to the enhancement of the GST rate from 12% to 18%, in light of the amended clause 2.17.1 of the contract terms dated 30.09.2022? (Question of law and fact, concerning contract interpretation and statutory tax changes). Petitioner's contention: The petitioner argued that the amendment to clause 2.17.1 on 30.09.2022, which provides for reimbursement of new taxes or levies, should be applied to the increased GST rate. They contended that if a reduction in tax rate would necessitate reimbursement to the State, then an increase should necessitate reimbursement to the contractor. They relied on the department's own order dated 30.09.2022. Revenue/State's contention: The counsel for the State 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.