Facts of the Case

M/s. Abhiram Infra Projects Pvt. Ltd., represented by its Managing Director Shri Alla Peri Reddy, a registered contractor with the Tamil Nadu Water Supplies and Drainage Board, had executed several works contracts for the Chief Engineer and Executive Engineer of the Board prior to the introduction of GST. Although GST was subsequently made applicable to works contracts through G.O.Ms.No.296 dated 09.10.2017 issued by the Finance Department, and the petitioner was collecting and paying GST for contracts executed after that date, no similar mechanism existed for reimbursement of GST on contracts executed before GST's introduction. The petitioner made a series of representations dated 03.05.2019, 03.07.2020, 07.10.2020, 27.05.2022, 08.07.2022, 29.08.2022, 15.09.2022, 19.12.2022, 12.01.2023 and 30.01.2023 seeking reimbursement of GST payable along with interest under Section 50 of the CGST and TNGST Acts, 2017, but received no response. It thereafter filed a writ petition before the Madurai Bench of the Madras High Court, heard on 29.09.2023.

Issues Involved

  1. Whether the respondents were obligated to consider and decide the petitioner's repeated representations seeking reimbursement of GST on works contracts executed prior to the introduction of GST.
  2. Whether such reimbursement, if due, should carry interest under Section 50 of the CGST and TNGST Acts.

Petitioner's Arguments

  • The petitioner contended that it had executed several works contracts for the respondents prior to the introduction of GST, and that GST was made applicable to works contracts only through G.O.Ms.No.296 dated 09.10.2017.
  • For contracts executed after the imposition of GST, the petitioner was collecting GST from the respondents and remitting it; but for contracts executed before GST's introduction, the respondents were liable to pay the corresponding GST component to the petitioner, who would in turn remit it to the tax authorities.
  • Despite filing ten separate representations over more than three years, the respondents had failed to consider or respond to the petitioner's claim, necessitating recourse to a writ of mandamus.

Respondent's Arguments

  • The order does not record any independent submissions of opposition from the Chief Engineer, Executive Engineer, or the Commissioner of GST & Central Excise resisting the petitioner's claim on merits.
  • Standing Counsel appeared for the GST authorities, but the case appears to have proceeded primarily on the respondents' failure to decide the petitioner's pending representations rather than any contested defence.

Court Order/Findings

  • The Court, without going into the merits of the petitioner's entitlement to reimbursement, held that the petitioner's representations warranted consideration by the first and second respondents in light of G.O.Ms.No.296 dated 09.10.2017.
  • The Court directed the Chief Engineer and Executive Engineer, Tamil Nadu Water Supplies and Drainage Board, to consider the petitioner's ten representations and complete the exercise within a period of eight weeks from receipt of the order.
  • The writ petition was allowed in these terms, with no order as to costs.

Important Clarification

  • Where a contractor claims reimbursement of GST from a government body for works contracts executed before GST's introduction (and the tax was made applicable to works contracts only by a later government order), courts will generally not adjudicate the underlying entitlement themselves but will direct the concerned authority to consider the contractor's representations on merits within a fixed timeframe.
  • Government orders extending GST applicability to works contracts, such as G.O.Ms.No.296 dated 09.10.2017 in Tamil Nadu, are the relevant benchmark against which such reimbursement claims must be examined by the paying authority.

Sections Involved

  • Section 50 of the Central Goods and Services Tax Act, 2017 and the Tamil Nadu Goods and Services Tax Act, 2017 — provides for interest on delayed payment of tax, claimed here on the GST reimbursement sought.
  • Article 226 of the Constitution of India — writ jurisdiction invoked to seek a mandamus directing consideration of the petitioner's representations.

Decision – In Favour of

The writ petition was allowed, but only to the extent of directing consideration of the petitioner's representations within eight weeks; the Court did not decide the underlying entitlement to GST reimbursement, so the outcome is disposed of with directions, procedurally in favour of the Assessee, rather than a final merits victory.

Related Case Laws

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

Case Details

  • Court: Madras High Court, Madurai Bench
  • Case No.: W.P.(MD).No.23820 of 2023
  • CNR: Not available on record
  • Coram: Justice S. Srimathy
  • Decision Date: 29.09.2023
  • Disposal Nature: Allowed - directed to consider representation within 8 weeks

Link to Download the Order

Download the full judgment (PDF)

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.