M/S Apex Structure PVT. LTD. Through Its Power Of Attorney Holder Neelabh Sugandhi vs. State Of M.P.

Held

The Court held that the writ petition was maintainable as no disputed question of facts was involved, thereby rejecting the preliminary objection raised by respondents No. 2 & 3 regarding the availability of an alternative remedy under the Arbitration Act. Regarding the substantive issue, the Court found that the GST rate had been enhanced from 12% to 18% effective January 1, 2022. The Court also noted that respondent No. 4, the State GST Department, confirmed this enhancement and the liability of respondent No. 2, a government entity, to pay the increased rate. Consequently, the Court directed respondent No. 2 to pay the differential GST amount of 6% to the petitioner for the period from January 1, 2022, to September 30, 2022, within three months of receiving the order. If payment was not made within this period, the petitioner would 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 Apex Structure Pvt. Ltd., is a construction company engaged in works awarded by respondent No. 2, a public enterprise and government entity. The petitioner was subjected to GST at 12% from October 2017 to December 2021. Subsequently, the GST rate was enhanced to 18% (9% CGST & 9% SGST) effective from January 1, 2022. 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 paying the enhanced 18% GST. The petitioner represented for reimbursement of the differential GST amount of 6% for invoices issued from January 1, 2022, to September 30, 2022. Respondent No. 2 acknowledged the liability but stated that approval from the State Government was pending. The petitioner then approached the High Court via a writ petition.

Key Issues

1. Whether the writ petition is maintainable given the existence of an alternative remedy under the Arbitration Act, as contended by respondents No. 2 & 3. 2. Whether respondent No. 2 is liable to reimburse the petitioner the differential GST amount of 6% for the period from January 1, 2022, to September 30, 2022, considering the enhancement of GST rates. Petitioner's arguments: The petitioner argued that no disputed question of facts was involved, making the writ petition maintainable and that they should not be relegated to the dispute resolution forum under the agreement. They sought reimbursement of the extra GST paid. Respondents' arguments: Respondents No. 2 & 3 raised preliminary objections regarding the maintainability of the writ petition and the availability of an alternative remedy under the Arbitration Act. Respondent No. 4 (State GST Department) confirmed that the GST rate had indeed been enhanced from 12% to 18% and that respondent No. 2, as a government entity, was liable to pay the enhanced rate.