M/S Rajendra Banshpal vs. The State Of Madhya Pradesh

Held

The Court held that the writ petition was maintainable because no disputed question of facts was involved, thus the petitioner could not be relegated to the dispute resolution forum under the agreement. The Court noted that the State GST Department also confirmed the enhanced GST rate from 12% to 18% and that respondent No.2, being a Government Entity, was liable to pay it. Following the parity with a previous Division Bench order in WP No.39378 of 2024, the Court directed respondent No.2 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, within three months of receiving a certified copy of 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 Rajendra Banshpal, a construction company, entered into agreements with respondent No.2, a public enterprise classified as a Government Entity under GST. The petitioner was awarded work orders for construction/renovation. Initially, GST was applied at 12% on payments received. However, effective January 1, 2022, the GST rate was enhanced to 18% by Notification No.15/2021 CT(R). The petitioner's grievance was that respondent No.2 continued to pay bills with 12% GST, forcing the petitioner to pay the difference of 6% GST. 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. The petitioner then approached the High Court seeking a writ of mandamus to direct respondent No.2 to release the admitted liability of Rs. 2,97,940/- along with interest.

Key Issues

1. Whether the writ petition is maintainable despite the availability of an alternative remedy under the Arbitration Act, given that no disputed question of facts is involved? - Petitioner's contention: The writ petition is maintainable as there are no disputed questions of fact, and the issue pertains to the admitted liability of the respondent. - Revenue/State's contention: The writ petition is not maintainable due to the availability of an alternative remedy under the Arbitration Act. 2. Whether respondent No.2 is liable to pay the differential GST amount of 6% for the period from January 1, 2022, to September 30, 2022, as admitted by them? - Petitioner's contention: Respondent No.2 is liable to pay the admitted differential GST amount as per their own letter dated September 26, 2022, and the enhanced GST rate notified by the government. - Revenue/State's contention: Not explicitly recorded, but their objection regarding maintainability suggests they may contest the payment or the forum.