M/S Ratna Khanij Udyog vs. State Of Chhattisgarh

Held

The Court noted the categorical stand taken by the respondents in their reply, which indicated their principal acceptance of the reimbursement claim, subject to the petitioner providing cogent proof of the additional tax liability incurred and paid under the GST regime. The counsel for the State further submitted that if the petitioner could produce proof of the additional tax liability suffered in respect of GST paid during the completion of the contract, the claim would be scrutinized and processed according to the governing policy. The petitioner's counsel indicated that while some documents were already filed, they would make a fresh claim supported by substantial documents. Consequently, the Court disposed of the writ petition, directing the petitioner to submit a fresh claim with supporting documents to the respondent authorities. The authorities were directed to process and scrutinize the claim and take an appropriate decision within 90 days from the receipt of the fresh claim.

Facts

The petitioner, M/s Ratna Khanij Udyog, filed a writ petition seeking reimbursement of Goods and Services Tax (GST) paid on services provided under contracts awarded before the introduction of GST. The petitioner argued that the contract prices were fixed under the old tax regime and did not include service tax. Upon the implementation of GST on July 1, 2017, the petitioner became liable to pay GST, which represented an additional tax burden. The petitioner sought directions for reimbursement of this additional liability from the respondent departments of the State of Chhattisgarh. The respondents, in their reply, acknowledged that GST paid on invoices for works where the contract bid was finalized before July 1, 2017, would be refunded, subject to the petitioner providing details of taxes paid before and after GST, and the difference in tax burden.

Key Issues

1. Whether the petitioner is entitled to reimbursement of GST paid on services provided under contracts awarded prior to July 1, 2017, where the contract price was not inclusive of service tax, under the provisions of the GST regime? Petitioner's contention: The petitioner argued that the contract prices were fixed under the old tax regime and did not account for service tax. The subsequent imposition of GST created an additional financial burden that should be reimbursed by the respondents. Respondents' contention: The respondents stated that the position of law is not disputable and that GST paid on invoices for works where the contract bid was finalized before July 1, 2017, would be refunded. However, they emphasized that the petitioner must submit detailed applications with proof of taxes paid prior to July 1, 2017, and GST paid thereafter, along with the difference in tax burden, to facilitate proper calculation and verification of the claim.