M/S. C.K. Asati Through Authorized Signatory Sandeep Asati vs. The State Of Madhya Pradesh

Held

The Court held that the writ petition was maintainable as there were no disputed questions of fact involved. The Court noted that the GST rate had been enhanced from 12% to 18% effective January 1, 2022, as per Notification No. 15/2021 CT(R). Respondent No. 2, a government entity, was liable to pay the enhanced GST. The Court took cognizance of Respondent No. 2's letter dated September 26, 2022, acknowledging its liability to pay the additional 6% GST from January 1, 2022. Therefore, the Court directed Respondent No. 2 to pay the difference of GST amount to the petitioner at 6% for the period from January 1, 2022, to September 30, 2022, within three months of receiving a certified copy of the order. Failure to comply would entitle the petitioner 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. C.K. Asati, a construction firm, was awarded work by Respondent No. 2, a public enterprise and government entity. The petitioner was paying GST on its services, initially at 12% until December 31, 2021. Following Notification No. 15/2021 CT(R), the GST rate increased to 18% effective January 1, 2022. The petitioner's grievance is that Respondent No. 2 continued to pay GST at the old rate of 12% for running bills issued after January 1, 2022, forcing the petitioner to bear the additional 6% GST. The petitioner submitted a representation, and Respondent No. 2, vide 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. Consequently, the petitioner filed a writ petition before the High Court.

Key Issues

1. Whether the Respondent No. 2 is liable to reimburse the petitioner for the extra GST amount paid at 6% from January 1, 2022, to September 30, 2022, considering the change in GST rates as per Notification No. 15/2021 CT(R)? The petitioner argued that the GST rate was enhanced to 18% from 12% effective January 1, 2022, and Respondent No. 2, being a government entity, should bear the increased cost as per the agreement and the prevailing GST law. The petitioner relied on the acknowledgment of liability by Respondent No. 2 in its letter dated September 26, 2022. The respondent/State initially raised an objection regarding the maintainability of the writ petition and the availability of an alternative remedy under the Arbitration Act. However, the Court noted that no disputed question of facts was involved. The State GST Department (Respondent No. 4) also confirmed that the GST rate had indeed been enhanced to 18% and was liable to be paid by Respondent No. 2.