Facts of the Case

The petitioner, Dhingra Brothers (India), filed a writ petition before the Punjab and Haryana High Court challenging the order dated 14.05.2025 passed by the Executive Engineer, Provincial Division, PWD (B&R), Ludhiana. By the said order, the respondent authority rejected the petitioner's claim for reimbursement of the differential GST of 6%, which arose due to the statutory increase in GST from 12% to 18%.

This was the second round of litigation. Earlier, the petitioner had approached the High Court through CWP-7112-2025, which had been disposed of with liberty to avail remedies permissible under law. During the pendency of that earlier writ petition, the respondent authority rejected the reimbursement claim through the impugned order, leading to the present writ petition.

Issues Involved

  1. Whether the High Court should exercise its writ jurisdiction to decide a contractual dispute relating to reimbursement of additional GST.
  2. Whether the existence of an arbitration clause in the contract bars the maintainability of the writ petition.
  3. Whether the petitioner should be directed to pursue the contractual remedy of arbitration instead of invoking Articles 226 and 227 of the Constitution.

Petitioner's Arguments

  • The petitioner contended that it was entitled to reimbursement of the additional 6% GST resulting from the statutory enhancement of GST from 12% to 18%.
  • It challenged the order dated 14.05.2025, whereby the respondent rejected its claim for reimbursement.
  • The petitioner sought quashing of the impugned order by invoking the writ jurisdiction of the High Court under Articles 226 and 227 of the Constitution.

Respondent's Arguments

  • The respondents relied upon the contractual terms governing the agreement between the parties.
  • It was pointed out that the contract contained a valid arbitration clause, providing an alternative dispute resolution mechanism.
  • The respondents submitted that the petitioner's grievance arose out of a contractual dispute and should therefore be resolved through arbitration rather than by filing a writ petition.

Court Order / Findings

The Punjab and Haryana High Court observed that the agreement executed between the parties contained an arbitration clause. During the hearing, counsel for the petitioner was unable to dispute the existence of the arbitration clause or the fact that the respondent had already rejected the reimbursement claim through the impugned order.

Considering the availability of an effective alternative remedy by way of arbitration, the Court held that it would not be appropriate to exercise its extraordinary writ jurisdiction under Articles 226 and 227 of the Constitution.

Accordingly, the writ petition was disposed of, granting liberty to the petitioner to avail the alternative remedies available under law, including arbitration. Pending applications, if any, were also disposed of.

Important Clarification

  • The High Court did not decide the merits of the petitioner's claim regarding reimbursement of the additional 6% GST.
  • The Court only held that, since the contract contained an arbitration clause, the dispute should first be resolved through the agreed contractual mechanism.
  • The order reiterates the settled principle that writ jurisdiction is ordinarily not invoked where an effective contractual remedy such as arbitration is available, unless exceptional circumstances exist.
  • The judgment does not determine whether reimbursement of the enhanced GST is legally payable; that issue remains open for adjudication before the appropriate forum.

Sections / Provisions Involved

  • Articles 226 and 227 of the Constitution of India
  • Arbitration Clause contained in the Contract/Agreement
  • Statutory enhancement of GST from 12% to 18% (reimbursement dispute

Link to Download the Order  https://mytaxexpert.co.in/uploads/1784874652_1945compressed.pdf

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