Facts of the Case

The petitioner, A.P. Nirman Limited, a company represented through its Director Mr. Rajesh Kumar Agrawal, is a civil contractor that had entered into an agreement with the Water Resources Department, Government of Chhattisgarh, for execution of civil works. Under the terms of the agreement, the petitioner was obligated to bear all applicable taxes. However, with the introduction of the Goods and Services Tax (GST) regime, the petitioner was required to pay additional taxes over and above what was contemplated when the agreement was entered into. According to the petitioner, the rules and regulations governing government works contracts entitled it to a refund of this additional tax burden from the respondent authorities. The petitioner made repeated representations to the State seeking such refund, but no decision was taken despite the passage of considerable time. The petitioner relied on an earlier order of the same High Court in WPC 460/2020, Manish Pipes Pvt. Ltd. vs State of Chhattisgarh, where similar relief was granted, and sought parallel treatment.

Issues Involved

  1. Whether the respondent authorities were obligated to decide the petitioner's pending representation seeking refund of the additional tax burden caused by the introduction of GST.
  2. Whether continued inaction on the representation, despite repeated approaches by the petitioner, warranted a writ direction from the Court.

Petitioner's Arguments

  • The agreement for civil works pre-dated the GST regime, and the additional tax burden imposed on account of GST's introduction was never factored into the contracted price.
  • Under the rules, regulations and General Conditions of Contract governing government works contracts, the respondent authorities were obligated to refund the additional tax burden suffered on account of the new tax law.
  • Despite repeated representations to the State authorities, no decision had been taken on the refund claim.
  • An identical grievance had already been considered favourably by the same High Court in Manish Pipes Pvt. Ltd. vs State of Chhattisgarh (WPC 460/2020), and the petitioner was entitled to similar relief.

Respondent's Arguments

  • Counsel for the State did not raise any objection to the limited relief sought by the petitioner, namely a direction to decide the pending representation.
  • No substantive defence was advanced on the merits of the petitioner's entitlement to refund of the additional tax burden.

Court Order/Findings

  • Since the State did not oppose the limited relief sought, the Court found it unnecessary to examine the merits of the refund claim itself.
  • The writ petition was disposed of with a direction to respondent No.2 (the Chief Engineer, Mahanadi Project) to take a decision on the petitioner's representation for refund of the additional tax burden suffered on account of the GST regime.
  • The respondents were directed to decide the representation preferably within 60 days from receipt of the order.
  • The deciding authority was directed to have regard to the rules, regulations, guidelines and General Conditions of Agreement prevailing on the subject matter while deciding the representation.

Important Clarification

  • Government contractors whose works contracts pre-date the GST regime, and who were contractually bound to bear "all taxes," can seek recourse through a representation to the contracting department for the additional tax burden triggered by GST, rather than approaching the Court directly on merits.
  • Courts are inclined to direct a time-bound decision on such representations (here, 60 days) rather than adjudicate entitlement themselves, especially where the State does not contest the limited relief of a decision being taken.
  • The deciding authority must consider the rules, regulations, guidelines and General Conditions of Contract prevailing at the relevant time — the refund is not automatic and remains subject to those governing provisions.

Sections Involved

  • Article 226 of the Constitution of India – invoked by the petitioner to seek a writ directing the authorities to decide the pending representation.
  • Central Goods and Services Tax Act, 2017 – the new tax regime whose introduction is stated to have caused the additional tax burden on the petitioner's works contract.

Decision – In Favour of

The writ petition was disposed of with directions; the Court did not adjudicate the petitioner's entitlement to refund on merits, but the direction to decide the representation within 60 days, having regard to the applicable rules and contract conditions, operates in substance in favour of the Assessee (the petitioner).

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Chhattisgarh, Bilaspur
  • Case No.: WPT No. 243 of 2023
  • CNR: Not available on record
  • Coram: Hon'ble Shri Justice Rakesh Mohan Pandey
  • Decision Date: 19.10.2023
  • Disposal Nature: Disposed of – authority directed to decide representation for refund of additional tax burden

Link to Download the Order

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