M/S Prime Construction vs. The State Of Madhya Pradesh

Held

The Court held that no disputed question of facts was involved in the case, thus the petitioner could not be relegated to the Dispute Resolution Forum under the agreement. The Court noted that Respondent No. 4 (State GST Department) also agreed that the GST rate had been enhanced from 12% to 18% and was liable to be paid by Respondent No. 2, a Government Entity. Following the parity with a previous order of the Division Bench dated December 12, 2024, in WP No. 39378 of 2024, 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 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 Prime Construction, filed a writ petition seeking a mandamus directing the respondents to release the admitted liability of the difference in GST amount of Rs. 4,01,780/- along with 24% interest. The petitioner is engaged in construction work and had agreements with Respondent No. 2, a public enterprise classified as a Government Entity. The GST rate applicable to the petitioner's services was enhanced from 12% to 18% effective January 1, 2022. However, Respondent No. 2 continued to pay GST at the old rate of 12% on running bills, creating a difference of 6% GST for invoices issued after January 1, 2022. Respondent No. 2 acknowledged this liability on September 26, 2022, but stated that approval from the State Government was pending. The petitioner approached the High Court as no approval was received.

Key Issues

1. Whether the Petitioner is entitled to a writ of mandamus directing the respondents to release the admitted differential GST amount of 6% for the period from January 1, 2022, to September 30, 2022, along with interest, considering the enhancement of GST rates and the admitted liability of Respondent No. 2. Contentions: Petitioner: Argued that Respondent No. 2 admitted the liability to pay the additional 6% GST from January 1, 2022, and that the petitioner is entitled to this amount along with interest. Relied on a Division Bench order dated December 12, 2024, in WP No. 39378 of 2024, which dealt with a similar issue of reimbursement of extra GST paid. Revenue/State: The judgment does not record specific arguments from the State GST Department (Respondent No. 4) beyond stating their agreement that the GST rate was enhanced and liable to be paid by Respondent No. 2. Respondents No. 2 and 3 filed a return raising objections regarding the maintainability of the writ petition and the availability of an alternative remedy under the Arbitration Act.