M/S T.R. Gupta Construction Through Its Authorized Signatory Prabal Gupta vs. The State Of Madhya Pradesh

Held

The Court held that respondent No. 2 is directed 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. This payment is to be made within three months from the date of receipt of a certified copy of the order. The Court reasoned that the GST rate had been officially enhanced, and respondent No. 2, as a government entity, was responsible for paying the correct GST. The Court found the petitioner's grievance valid and rejected the objections regarding the maintainability of the writ petition, stating that no disputed question of facts was involved. If respondent No. 2 fails to make the payment within the stipulated period, the petitioner will 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 T.R. Gupta Construction, is engaged in construction work and has been awarded contracts by respondent No. 2, a public enterprise and government entity. The petitioner paid GST at 12% on work executed from October 2017 to December 2021. Subsequently, GST rates were enhanced to 18% (9% CGST & 9% SGST) effective January 1, 2022, through Notification No. 15/2021 CT(R). The petitioner's grievance is that respondent No. 2 continued to pay running bills at the old rate of 12% GST, while the petitioner was obligated to pay the enhanced 18% GST. The petitioner sought reimbursement of the differential 6% GST for the period January 1, 2022, to September 30, 2022. Respondent No. 2 acknowledged this liability but stated that approval from the State Government was pending. The petitioner then approached the High Court.

Key Issues

1. Whether the respondents are liable to reimburse the petitioner for the additional GST paid at 6% for the period from January 1, 2022, to September 30, 2022, considering the enhancement of GST rates from 12% to 18%? Petitioner's Contention: The petitioner argued that the GST rate was enhanced to 18% from January 1, 2022, as per Notification No. 15/2021 CT(R). They contended that respondent No. 2, being a government entity, should have paid the enhanced GST on the running bills, and since they paid at the old rate of 12%, the petitioner bore the additional burden of 6% GST. The petitioner sought reimbursement of this differential amount along with interest. They also argued that a writ petition was maintainable as no disputed question of facts was involved. Revenue/State's Contention: Respondents No. 2 & 3 initially raised objections regarding the maintainability of the writ petition and the availability of an alternative remedy under the Arbitration Act. Respondent No. 4, the State GST Department, confirmed that the GST rate had indeed been enhanced to 18% and was liable to be paid by respondent No. 2.