Sanjay Pandey vs. The State Of Madhya Pradesh

Held

The Court held that no disputed question of facts was involved, and therefore, 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 enhancement of the GST rate from 12% to 18% and that respondent No. 2, as a Government Entity, was liable to pay this enhanced rate. Following the precedent set by a Division Bench of the same Court in WP No. 39378 of 2024, the Court directed respondent No. 2 to pay the differential 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. 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, Sanjay Pandey, filed a writ petition seeking a mandamus to direct the respondents to release the admitted liability of Rs. 3,18,213/- towards the difference in GST amount, along with 24% interest. The petitioner is engaged in construction work and had been awarded contracts by respondent No. 2, a public enterprise classified as a Government Entity. The petitioner paid GST at 12% until December 31, 2021. Following Notification No. 15/2021 CT(R) dated 18.11.2021, the GST rate increased to 18% from January 1, 2022. However, the respondents continued to pay GST at 12% on running bills, forcing the petitioner to pay the difference of 6%. Respondent No. 2 acknowledged this liability on September 26, 2022, but stated that approval from the State Government was pending. The State GST Department confirmed the rate enhancement. The petitioner approached the High Court as the payment was delayed.

Key Issues

1. Whether the respondents are liable to pay the differential GST amount of 6% on the work executed from January 1, 2022, to September 30, 2022, along with interest, as per the enhanced GST rate notified by the Central Government. Petitioner's Contention: The petitioner argued that the respondents are obligated to pay the enhanced GST rate of 18% on the work executed after January 1, 2022, as per Notification No. 15/2021 CT(R). They contended that respondent No. 2 had accepted this liability and that the petitioner should not bear the burden of the differential GST amount. Reliance was placed on a previous Division Bench order of the same High Court in WP No. 39378 of 2024, which dealt with a similar issue of reimbursement of extra GST paid. Revenue/State's Contention: The respondents raised objections regarding the maintainability of the writ petition and the availability of an alternative remedy under the Arbitration Act. However, the judgment notes that the State GST Department agreed that the GST rate had been enhanced and was liable to be paid by respondent No. 2.