Natvar Construction Co. Through Its Authorized Signatory Hirpara Jayantibhai Manjibhai (Government C vs. The State Of Madhya Pradesh

Held

The Court held that the writ petition was maintainable as no disputed question of facts was involved. Regarding the GST reimbursement, the Court noted the respondent State GST Department's submission that the GST rate had been enhanced from 12% to 18% and was payable by respondent No. 2. Consequently, the Court directed respondent No. 2 to pay the difference in GST amount to the petitioner at 6% for the period from January 1, 2022, to January 24, 2022, within three months of receiving a certified copy of the order. If respondent No. 2 failed to comply, the petitioner would be entitled to interest at 6% per annum from the date of entitlement. The Court did not expressly leave any issue undecided. The ratio decidendi is that when a clear excess payment of tax is demonstrable without complex factual disputes, and the relevant authority acknowledges the situation, a High Court can direct reimbursement under its writ jurisdiction even if an arbitration clause exists, to avoid undue hardship and delay.

Facts

The petitioner, Natvar Construction Co., filed a writ petition under Article 226 of the Constitution of India seeking reimbursement of an extra GST amount paid at 6% for the period between January 1, 2022, and January 24, 2022. The petitioner was awarded a construction work contract by the respondents in 2018. The GST applicable to this work was initially 18%, later reduced to 12%. The petitioner claims that for the period from January 1, 2022, to January 24, 2022, they paid GST at 18% instead of the applicable 12%, resulting in an excess payment of 6%. Despite submitting several representations to the respondents for a refund, no action was taken, prompting the petitioner to approach the High Court. The respondents raised an objection regarding the maintainability of the petition due to an alternative remedy under the Arbitration Act.

Key Issues

1. Whether the writ petition is maintainable before this Court, considering the availability of an alternative remedy under the Arbitration Act? (Question of law) 2. Whether the petitioner is entitled to reimbursement of the extra GST amount paid at 6% for the period from January 1, 2022, to January 24, 2022? (Question of mixed law and fact) Petitioner's Contention: The petitioner argued that no disputed question of facts is involved in the case, making it suitable for adjudication by the High Court under its writ jurisdiction, and thus, they should not be relegated to the Dispute Resolution Forum. The petitioner also contended that they had paid GST at 18% for the specified period, whereas the applicable rate was 12%, leading to an excess payment of 6% which they are entitled to be reimbursed. Respondents' Contention: The respondents, specifically respondent No. 4 (State GST Department), stated that the rate of GST was enhanced from 12% to 18% and was liable to be paid by respondent No. 2 (Government Entity). The respondents also raised an objection regarding the maintainability of the writ petition due to the existence of an alternative remedy under the Arbitration Act.