Skb Projects INDIA Private Limited vs. The State Of Madhya Pradesh

Held

The Court held that the writ petition was maintainable, stating that no disputed question of facts were involved, and therefore, the petitioner could not be relegated to the Dispute Resolution Forum provided under the agreement. The Court also noted that Respondent No. 4, the State GST Department, confirmed that the GST rate had indeed been enhanced from 12% to 18% and that Respondent No. 2, a Government Entity, was liable to pay this enhanced rate. Following the parity with the Division Bench order dated December 12, 2024, passed in WP No. 39378 of 2024, the Court directed respondent No. 2 to pay the difference of GST amount to the petitioner at the rate of 6% for the period from January 1, 2022, to September 30, 2022, within a period of three months from the date of receipt of a certified copy of the order. The Court further stipulated that if respondent No. 2 failed to comply, the petitioner would be entitled to interest at the rate of 6% per annum from the date of entitlement. The writ petition was disposed of with these directions.

Facts

The petitioner, SKB Projects India Private Limited, is engaged in construction work for government entities. The petitioner was awarded work orders for construction/renovation of Govt. New Law College, Indore. The GST rate applicable to the petitioner's services was initially 12% from October 30, 2017, to December 31, 2021. Subsequently, the GST rate was enhanced to 18% (9% CGST & 9% SGST) effective January 1, 2022, vide Notification No. 15/2021 CT(R). The petitioner's grievance is that respondent No. 2 (a public enterprise) continued to pay bills with 12% GST, forcing the petitioner to pay the difference of 6% GST. Respondent No. 2, via a letter dated September 26, 2022, acknowledged the liability to pay the additional 6% GST from January 1, 2022, but stated that approval from the State Government was pending. The petitioner approached the High Court seeking a writ of mandamus to direct respondent No. 2 to release the admitted liability of Rs. 45,19,000/- along with interest.

Key Issues

1. Whether the writ petition is maintainable before this Court, considering the availability of an alternative remedy under the Arbitration Act, as argued by respondents No. 2 & 3? 2. Whether respondent No. 2 is liable to pay the differential GST amount at the enhanced rate of 18% (i.e., an additional 6%) for the period from January 1, 2022, to September 30, 2022, as contended by the petitioner? Petitioner's arguments: The petitioner argued that a writ of mandamus should be issued directing respondent No. 2 to release the admitted liability of Rs. 45,19,000/- along with 18% interest. The petitioner relied on a previous Division Bench order of the same High Court dated December 12, 2024, in WP No. 39378 of 2024, which dealt with a similar issue of reimbursement of extra GST paid. The petitioner contended that since no disputed question of facts was involved, the writ petition was maintainable and the petitioner should not be relegated to the dispute resolution forum under the agreement. Revenue/State's arguments: Respondents No. 2 & 3 raised objections 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 to 18% and that respondent No. 2, being a government entity, was liable to pay it.