Maneesh Pipes PVT. LTD. vs. State Of Chhattisgarh

Held

The Court considered the facts and circumstances, particularly the circulars dated October 10, 2018, and December 21, 2017, relied upon by the petitioner. The Court also noted that the petitioner's claim had not been denied or disputed by the respondents by passing any order or rejecting the claim. Therefore, the Court held that the stage for invoking the arbitration clause had not yet arisen. The Court directed respondents No. 2 to 5 to take a decision on the petitioner's claim/representation for the refund of GST at the earliest, preferably within 60 days from the receipt of the order. The petitioner was granted liberty to avail appropriate remedies thereafter, based on the decision passed by the respondents. The Court did not expressly leave any issue undecided.

Facts

The petitioner, Maneesh Pipes Pvt. Ltd., filed a writ petition seeking the release of an amount representing GST paid by them, along with interest. The petitioner had secured a contract for water supply infrastructure works prior to July 1, 2017. Upon the implementation of GST on July 1, 2017, the petitioner initially paid 18% GST, which was later reduced to 12%. The petitioner contended that the State Government had issued circulars providing for the refund of tax levied on account of taxes subsequently imposed. The petitioner had made repeated representations to the respondents (various authorities within the Public Health Engineering Department) but had not received a response. The State counsel argued that the contract contained an arbitration clause, and therefore, the petitioner should pursue arbitration instead of a writ petition.

Key Issues

1. Whether the petitioner is entitled to a refund of GST paid on a contract awarded prior to the implementation of GST, based on subsequent government circulars? 2. Whether the existence of an arbitration clause in the contract bars the petitioner from approaching the High Court through a writ petition for the release of GST refund? Petitioner's arguments: The petitioner argued that they are entitled to a refund of GST paid, citing circulars dated October 10, 2018, and December 21, 2017, issued by the Government of Chhattisgarh's Public Works Department and Town Administration and Development Department, respectively. These circulars, according to the petitioner, provide for the refund of tax levied on account of taxes subsequently imposed. The petitioner also contended that their claim had not been denied or disputed by the respondents, and therefore, the arbitration clause had not yet become relevant. Revenue's arguments: The State counsel argued that the contract between the petitioner and the respondents contained an arbitration clause. Consequently, the petitioner should avail the remedy of arbitration to resolve the dispute, and the writ petition was not maintainable at this juncture.