M/S Pratibha Associates Through Its Proprietor Vinay Chhajed vs. The State Of Madhya Pradesh

Held

The Court held that the petitioner was entitled to reimbursement of the differential GST amount. The Court noted that the GST rate on construction services was enhanced to 18% from January 1, 2022, as per Notification No. 15/2021 CT(R). Respondent No. 2, a government entity, was liable to pay this enhanced rate. The Court found that respondent No. 2 had acknowledged its liability to pay the additional 6% GST for the period from January 1, 2022, to September 30, 2022. The Court also dismissed the preliminary objection regarding the maintainability of the writ petition, stating that no disputed question of facts was involved. Consequently, respondent No. 2 was directed to pay the difference of GST amount to the petitioner at 6% for the specified period within three months. Failure to comply would entitle the petitioner to interest at 6% per annum from the date of entitlement. The writ petition was disposed of to the extent indicated.

Facts

The petitioner, M/s Pratibha Associates, a construction firm, filed a writ petition seeking reimbursement of an extra GST amount paid between January 1, 2022, and September 30, 2022. The petitioner was awarded several construction works by respondent No. 2, a government entity. Initially, GST was levied at 12% on the petitioner's services. However, effective January 1, 2022, the GST rate was enhanced to 18% (9% CGST and 9% SGST) via Notification No. 15/2021 CT(R). The petitioner continued to pay 18% GST, but respondent No. 2 paid bills at the old rate of 12%. Respondent No. 2 acknowledged the liability to pay the additional 6% GST from January 1, 2022, but stated that approval from the State Government was pending. The State GST Department confirmed the enhanced GST rate is applicable and payable by respondent No. 2.

Key Issues

1. Whether the petitioner is entitled to reimbursement of the differential GST amount of 6% for the period from January 1, 2022, to September 30, 2022, as per the enhanced GST rate applicable to construction services provided to government entities? Petitioner's Arguments: The petitioner argued that the GST rate on their construction services was enhanced from 12% to 18% effective January 1, 2022, as per Notification No. 15/2021 CT(R). Despite this, respondent No. 2 continued to pay bills at the old rate of 12%, forcing the petitioner to bear the additional 6% GST liability. The petitioner sought reimbursement of this extra amount paid. They also contended that no disputed question of facts was involved, making a writ petition maintainable and alternative remedies under the Arbitration Act unnecessary. Revenue/State's Arguments: Respondent No. 2 initially raised objections regarding the maintainability of the writ petition and the availability of an alternative remedy under the Arbitration Act. However, they later acknowledged the liability to pay the additional 6% GST. The State GST Department (Respondent No. 4) confirmed that the GST rate had indeed been enhanced to 18% and that respondent No. 2, as a government entity, was liable to pay it.