Facts of the Case

Ganpati Infra Civil Pvt. Ltd., a Special Purpose Vehicle, entered a contract with Bilaspur Smart City Limited (BSCL) for construction of Bituminous Road and Drain Works, with a work order issued on 28.04.2021. After the contract was awarded, the GST Council enhanced the applicable rate of tax to 18%, and the petitioner claimed entitlement to the difference in GST amount under Clause C of the contract's 'Taxes, Duties and Statutory Levies' provisions, which required BSCL to pass on the benefit of any change in indirect tax laws, including GST, over and above the total contract value. BSCL rejected the petitioner's representation on 11.04.2023 on the ground that no supporting documents were enclosed, and rejected a second representation on 19.05.2023 on the ground that no escalation clause applied to the contract.

Issues Involved

  1. Whether rejecting the petitioner's GST reimbursement claim solely for want of supporting documents was justified, when the GST Council's rate-increase decision was itself a public document.

Petitioner's Arguments

  • The claim was based on the GST Council's own public decision to increase the tax rate, which is a matter of public record within the respondents' own knowledge, so rejecting the claim purely for lack of enclosed documents was arbitrary.
  • Clause C of the contract obliged BSCL to incorporate and pass on the benefit of changes in GST law over and above the total contract value.
  • The petitioner was willing to submit fresh representation along with all relevant supporting documents.

Respondent's Arguments

  • BSCL had considered the petitioner's representations in an objective manner and rightly rejected them.

Court Order / Findings

  • The Court examined Clause C of the contract and found it did contemplate incorporation of GST law changes into invoices, subject to the contractor submitting a formal request with necessary supporting documents.
  • Finding the rejection was based specifically on absence of supporting documents, the Court considered it appropriate to allow the petitioner to submit a fresh representation with all supporting documents.
  • It disposed of the writ petition permitting the petitioner to submit a fresh representation, directing the respondents to consider and decide it afresh — without prejudice to the earlier 11.04.2023 rejection — within four months, at the earliest and in accordance with law.

Important Clarification

The Court did not rule that the petitioner is entitled to the GST rate-increase reimbursement — it only found that outright rejection for lack of documents was premature, and gave the petitioner a fresh chance to substantiate its claim with proper proof. Whether the reimbursement is ultimately granted depends on BSCL's fresh decision on the merits.

Sections Involved

  • Central Goods and Services Tax Act, 2017 (GST Council rate notifications on works contract services)

Decision – In Favour of

Disposed of with procedural relief in favour of the Petitioner — a fresh opportunity to substantiate its claim with documents, decision to follow within four months — no final ruling on entitlement.

Case Details

  • Court: High Court of Chhattisgarh, Bilaspur
  • Case No.: WPC No. 3111 of 2023
  • Coram: Hon'ble Shri Justice Parth Prateem Sahu
  • Date of Order: 11.07.2023

Link to Download the Order

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