Facts of the Case

The petitioner, Gayatri Ventures, a partnership firm from Durg, Chhattisgarh, had executed a works contract for the Public Works Department (PWD), Government of Chhattisgarh. The rate of GST applicable to works contracts changed from 12% to 18% with effect from 18.07.2022. The petitioner claimed it had to bear this increased GST burden on an ongoing contract and sought a refund of the excess GST from the department. It had already made a detailed representation to Respondent No. 2 (the Executive Engineer, PWD, Durg Division) on 21.4.2023, but the representation remained undecided, prompting the writ petition before the Chhattisgarh High Court.

Issues Involved

  1. Whether the petitioner was entitled to a refund of the excess GST arising from the mid-contract rate revision from 12% to 18%.
  2. Whether the PWD was obliged to decide the petitioner's representation, given that other State departments (Water Resources, Irrigation, etc.) had reportedly already extended such refunds to their contractors.

Petitioner's Arguments

  • Other State Government departments had already taken a decision to refund the excess GST arising from the rate change to their contractors, and there was no reason for PWD to take a different stand.
  • A detailed representation dated 21.4.2023 had already been submitted to Respondent No. 2 but remained undecided.
  • The petitioner was willing to submit a fresh representation to both Respondent Nos. 2 and 3, and sought a direction that it be decided within a specified time.

Respondent's Arguments

  • The State counsel pointed out that the petitioner had not submitted any representation before Respondent No. 3, who was also a competent authority to consider the claim.

Court Order / Findings

  • The Court did not decide the question of entitlement to refund on merits.
  • It permitted the petitioner to submit a fresh representation before Respondent Nos. 2 and 3, raising the same grievance.
  • Respondent Nos. 2 and 3 were directed to consider and decide the representation within an outer limit of 60 days, taking into account similar decisions already taken by the State Government for contracts with other departments such as Irrigation and Water Resources.

Important Clarification

This order does not itself confirm that contractors are entitled to a GST refund on account of the 12%-to-18% rate change on works contracts. What it does confirm is that if similarly placed departments of the same State Government have already extended such relief, an authority cannot arbitrarily ignore that pattern while deciding a contractor's representation — it must engage with the comparison and decide within a fixed timeframe. Contractors facing the same rate-change issue should build their representation around any comparable departmental precedent to strengthen their case.

Sections Involved

  • Central Goods and Services Tax Act, 2017 and the corresponding Chhattisgarh Goods and Services Tax Act, 2017 — governing the rate of tax on works contract services.
  • Notification effecting the rate change on works contract services from 12% to 18% with effect from 18.07.2022.

Decision – In Favour of

Disposed of without a decision on merits; the petitioner was granted procedural relief — a time-bound direction for consideration of its representation, rather than a substantive ruling on GST refund entitlement.

Case Details

Court: High Court of Chhattisgarh, Bilaspur
Case No.: WPC No. 2925 of 2023
Coram: Hon'ble Mr. Justice Parth Prateem Sahu
Date of Order: 03.07.2023

Link to Download the Order

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