Facts of the Case

The petitioner, M/s Jyothy Constructions, was an ‘A’ Class Government Contractor and had successfully participated in a bidding process concerning work awarded by the Kerala Water Authority. Pursuant to the award of work, Agreement No. 79/2017-18/SE/PHC/KNR dated 15.03.2018, produced as Ext.P1, was executed between the petitioner and the Kerala Water Authority.

According to the petitioner, the allotted work was completed to the satisfaction of the Kerala Water Authority, and payment for the work had also been received. However, the petitioner claimed entitlement to receive GST over and above the amounts already paid.

The petitioner relied upon the Kerala Water Authority’s Circular No. GST/002.17 dated 10.08.2017, produced as Ext.P2, concerning reimbursement of GST. In furtherance of the claim, the petitioner submitted Ext.P3 representation dated 12.01.2022 before the competent authority. The grievance raised before the High Court was that the said representation had not yet been considered.

Issues Involved

The principal issues arising in the writ petition were:

  1. Whether the petitioner, after completing the contractual work and receiving the contractual payment, was entitled to claim GST over and above the amounts already paid.
  2. Whether the petitioner’s claim for GST reimbursement required consideration in light of the Kerala Water Authority’s Circular dated 10.08.2017 regarding reimbursement of GST.
  3. Whether the competent authority was required to consider and decide Ext.P3 representation dated 12.01.2022.
  4. Whether the petitioner was entitled to a direction requiring a decision on the pending representation after being afforded an opportunity of hearing.

Petitioner’s Arguments

The petitioner contended that:

  • It was an ‘A’ Class Government Contractor and the successful bidder for work undertaken for the Kerala Water Authority.
  • The work had been completed to the satisfaction of the Kerala Water Authority.
  • Payment for the work had already been received.
  • GST was payable or reimbursable over and above the amounts already paid.
  • The Kerala Water Authority itself had issued Circular No. GST/002.17 dated 10.08.2017 concerning reimbursement of GST.
  • Despite submission of Ext.P3 representation in January 2022, the competent authority had not taken a decision.
  • The petitioner would be satisfied if the competent authority was directed to consider Ext.P3 and pass appropriate orders.

Respondents’ Arguments

The learned Standing Counsel appearing for the Kerala Water Authority stated that there was no objection to the issuance of a direction requiring the competent authority to consider Ext.P3 representation.

Thus, the respondents did not oppose the limited relief sought by the petitioner for consideration and disposal of the pending representation.

Court Order / Findings

The High Court of Kerala disposed of the writ petition by directing the competent among the respondents to:

  • take a decision on Ext.P3 representation submitted by the petitioner;
  • afford the petitioner an opportunity of being heard before taking the decision; and
  • complete the decision-making process within two months from the date of receipt of a certified copy of the judgment.

Accordingly, the writ petition was disposed of with a time-bound direction for consideration of the petitioner’s GST reimbursement representation.

Important Clarification

A significant clarification arising from the judgment is that the High Court did not finally adjudicate or declare that the petitioner was substantively entitled to GST reimbursement. The Court did not quantify any GST amount, direct immediate payment of GST, or record a final finding that the contractual terms necessarily required reimbursement.

The operative relief was limited to directing the competent authority to consider Ext.P3 representation, provide an opportunity of hearing, and take a decision within the prescribed period of two months.

Therefore, the judgment should be understood as a case concerning administrative consideration of a pending GST reimbursement claim in relation to government contract work, rather than a final judicial determination granting GST reimbursement on merits.

Sections / Legal Provisions Involved

The judgment does not expressly identify or adjudicate any specific section of the CGST Act, 2017 or Kerala SGST Act, 2017.

The matter principally concerns:

  • GST reimbursement in relation to a Government works contract;
  • contractual claim for GST over and above amounts already paid;
  • Kerala Water Authority Circular No. GST/002.17 dated 10.08.2017;
  • consideration of a pending representation by the competent authority;
  • opportunity of hearing and administrative decision-making; and
  • exercise of writ jurisdiction under Article 226 of the Constitution of India, the petition being WP(C) No. 9266 of 2022.

Professional legal clarification: Since the judgment itself does not expressly cite a particular GST statutory section, attributing a specific CGST/KSGST section as having been “decided” by the Court would alter the scope and meaning of the order. 

Link to download the order -https://mytaxexpert.co.in/uploads/1783160314_886compressed.pdf

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