M/S Mool Chand Jain PVT LTD Through Director Mool Chand Jain vs. The State Of Madhya Pradesh

Held

The Court held that the petitioner completed the work from 2017 until 2021, which falls within the period after the applicability of the GST Act, 2017. The Court noted that the petitioner must have purchased raw materials and availed input credit during this period. The Court reasoned that if GST was erroneously recovered and deposited by the Public Works Department, the petitioner has an efficacious remedy to submit a claim under Section 54 of the CGST Act for a refund. The complete procedure for refunding tax is provided under Section 54 of the CGST Act and Chapter X of the CGST Rules, 2017. Therefore, the writ petition is not maintainable before the High Court. The Court granted the petitioner liberty to approach the competent authority for a refund and to raise a dispute under the Dispute Resolution System, if aggrieved by the respondents' actions, and thereafter before the Madhya Pradesh Madhyastham Adhikaran. The issue of whether the petitioner is ultimately entitled to a refund was expressly left to be decided by the competent authority.

Facts

The petitioner, M/s Mool Chand Jain Pvt Ltd, a construction firm, entered into a work contract with the Public Works Department on June 10, 2015, prior to the introduction of GST on July 1, 2017. The petitioner alleges that from 2017-18 to 2020-21, the respondent department wrongly deducted CGST and SGST from running bills, despite the contract being predating GST. The petitioner submitted a representation on September 11, 2023, seeking a refund of the wrongly deducted GST, after adjusting VAT. The petitioner relies on a Karnataka High Court judgment and a previous order of this Court in a similar matter. The petitioner is seeking a direction from the respondents to consider this representation.

Key Issues

1. Whether the petitioner is entitled to a refund of CGST and SGST deducted from running bills for a work contract entered into prior to July 1, 2017, when GST was not applicable. Petitioner's arguments: The petitioner contends that since the work contract was executed before the GST regime, they are not liable to pay GST on the services rendered during the period 2017-18 to 2020-21. They argue that the deduction of CGST and SGST by the respondent department was erroneous and they are entitled to a refund of these amounts, after adjusting any applicable VAT. They cite the Karnataka High Court judgment in Sri Chandrashekharaiah vs. State of Karnataka and a previous order of this Court in WP No. 28124/2018. Revenue's arguments: The respondents, represented by the Additional Advocate General, have not explicitly recorded arguments in the judgment. However, the Court's reasoning implies that the GST Act, 2017, is applicable for the period the work was completed (2017-2021) and that the petitioner has an alternative statutory remedy for refund claims.