M/S Trishul Construction A Partnership Frim vs. Union Of INDIA

Held

The Court held that the petitioner is entitled to reimbursement of the GST amount paid. The Court found that the petitioner had initiated the request for GST neutralization prior to the completion of the work, and the payment of GST was duly verified by the respondent No. 3 from the GST department. The Court noted that the respondents denied the claim merely on technicalities, specifically the passing of the final bill and submission of the no-claim certificate, without pointing out any legal grounds to deny the claim. The Court also observed that the supplementary agreement, though presented by the petitioner, was not signed by the respondents, indicating no fault on the petitioner's part. Furthermore, the Court took into account that in identical situations, other railway divisions had accepted GST neutralization claims after the issuance of completion certificates. Therefore, the Court directed the respondent department to accept the GST neutralization claim and reimburse the petitioner accordingly.

Facts

The petitioner, M/s Trishul Construction, a partnership firm engaged in government contractorship, was awarded a rail line project in September 2017. As GST became applicable from July 2017, the petitioner deposited consolidated GST for the executed works, amounting to Rs. 2,34,69,436.62, and sought reimbursement from the respondents. The contract work was completed on June 29, 2019, and a completion certificate was issued on August 26, 2019. The petitioner made multiple requests for GST reimbursement, but the respondent No. 3, citing a communication from the Accounts Department, denied the claim on February 5, 2021. The denial was based on the grounds that the claim could not be entertained after the final bill was passed and a no-claim certificate was submitted. The petitioner filed a writ petition challenging this denial.

Key Issues

1. Whether the petitioner is entitled to reimbursement of GST paid, despite the final bill being passed and a no-claim certificate being submitted, considering the claim was initiated prior to project completion? Petitioner's arguments: The petitioner contends that their claim for GST reimbursement was submitted prior to project completion and that subsequent documentation formalities, like passing the final bill, should not disentitle them from their legitimate claim. They emphasize that the GST payment is undisputed and verified by the GST department. The petitioner also points to similar cases where other railway divisions accepted GST neutralization claims after completion certificates were issued, citing Annexures P/14 to P/17. They argue the respondent's action is arbitrary and illegal. Respondents' arguments: The respondents argue that as per policy, no GST was deducted from the petitioner's bills. They deny the petitioner's entitlement to reimbursement, stating compliance with Clause 11 of the Joint Procedural Order (JPO) dated January 25, 2018, is mandatory, which bars claims after the final bill is passed and a no-claim certificate is submitted. They further assert that a supplementary agreement, required for GST neutralization, was not fully executed by both parties and that necessary documentary evidence was not submitted before the final bill was passed.