M/S Gayatri Construction vs. The State Of Madhya Pradesh

Held

The Court held that no disputed question of facts was involved in the case, thus making the writ petition maintainable and that the petitioner could not be relegated to the dispute resolution forum. The Court noted that Respondent No. 4, the State GST Department, also confirmed the enhancement of the GST rate from 12% to 18% and the liability of Respondent No. 2 to pay the increased amount. Following the parity with the Division Bench order dated December 12, 2024, in WP No. 39378 of 2024, the Court directed Respondent No. 2 to pay the difference in GST amount to the petitioner at the rate of 6% for the period from January 1, 2022, to September 30, 2022, within three months of receiving a certified copy of the order. If payment is not made within this period, the petitioner would be entitled to interest at 6% per annum from the date of entitlement. The writ petition was disposed of with these directions.

Facts

The petitioner, M/s Gayatri Construction, is engaged in construction work and has been awarded contracts by Respondent No. 2, a public enterprise. The petitioner was paying GST at 12% on work executed until December 31, 2021. Following Notification No. 15/2021 CT(R) dated November 18, 2021, the GST rate increased to 18% effective January 1, 2022. However, Respondent No. 2 continued to pay bills with 12% GST, forcing the petitioner to pay the difference of 6%. The petitioner submitted a representation, and Respondent No. 2, vide a letter dated September 26, 2022, accepted the liability to pay the additional 6% GST from January 1, 2022, but stated that approval from the State Government was pending. The petitioner then filed a writ petition seeking a direction to release the admitted liability of Rs. 3,69,000/- along with interest.

Key Issues

1. Whether the writ petition is maintainable given the availability of an alternative remedy under the Arbitration Act, as contended by respondents No. 2 & 3? 2. Whether Respondent No. 2 is liable to pay the difference in GST amount at the enhanced rate of 6% for the period from January 1, 2022, to September 30, 2022, along with interest? Petitioner's Arguments: - The petitioner argued that no disputed question of facts is involved, making the writ petition maintainable and that they should not be relegated to the dispute resolution forum. - The petitioner relied on a previous order of the Division Bench of the High Court dated December 12, 2024, in WP No. 39378 of 2024, which directed reimbursement of extra GST paid along with interest. Respondents' Arguments: - Respondents No. 2 & 3 raised an objection regarding the maintainability of the writ petition and the availability of an alternative remedy under the Arbitration Act. - Respondent No. 4 (State GST Department) confirmed that the GST rate was enhanced from 12% to 18% and that Respondent No. 2, being a government entity, is liable to pay the enhanced amount.