Facts of the Case

A.P. Nirman Limited, a civil contractor engaged by the State of Chhattisgarh's Water Resources Department for execution of civil works, filed a writ petition before the Chhattisgarh High Court challenging the department's inaction on its claim for reimbursement of additional tax burden.

Under the works agreement, the petitioner was contractually responsible for paying all applicable taxes. However, with the introduction of the GST regime with effect from 1 July 2017, the petitioner had to bear certain additional taxes over and above what was contemplated at the time the agreement was entered into.

The petitioner contended that, under the applicable rules and regulations, the department was obliged to refund this additional tax burden caused by the transition to GST, and had made repeated representations to that effect without any decision being taken. The petitioner relied on an earlier order of the same High Court in Manish Pipes Pvt. Ltd. v. State of Chhattisgarh (WPC 460/2020), granting similar relief to another contractor.

The matter was heard and decided by a Single Judge on 19.10.2023.

Issues Involved

  1. Whether the respondents should be directed to decide the petitioner's pending representation seeking reimbursement of the additional tax burden resulting from the introduction of the GST regime.

Petitioner's Arguments

  • The petitioner contended it was entitled, under applicable rules, regulations and general conditions of the works agreement, to reimbursement of the additional tax burden arising from the GST transition, and that its repeated representations to the State authorities had gone undecided, relying on the precedent in Manish Pipes Pvt. Ltd.

Respondent's Arguments

  • The State's counsel did not object to the limited relief sought by the petitioner — namely, a direction that a decision be taken on its pending representation.

Court Order / Findings

  • Given the State's non-objection to the limited relief sought, the Court disposed of the writ petition with a direction to the respondent (Executive Engineer) to take a decision on the petitioner's representation seeking refund of the additional tax burden.
  • The decision was directed to be taken preferably within 60 days from receipt of the order, with the State authorities expected to consider the applicable rules, regulations, guidelines and general conditions of the works agreement while deciding.

Important Clarification

This order does not decide whether the petitioner is actually entitled to reimbursement of the GST-transition tax burden — it only directs the department to decide the pending representation within a time frame, having regard to the applicable contractual and regulatory framework. Contractors with similar GST-transition reimbursement claims under government works contracts should note this is a procedural direction, not a ruling establishing entitlement.

Sections Involved

  • Central Goods and Services Tax Act, 2017 – transition-related tax burden on pre-GST works contracts
  • General conditions of government works contracts governing tax liability allocation

Decision – In Favour of

The writ petition was disposed of with a direction favourable to the petitioner-contractor procedurally — requiring the department to decide its pending reimbursement representation within 60 days — but without any substantive ruling granting or denying the refund itself.

Case Details

  • Court: High Court of Chhattisgarh, Bilaspur
  • Case No.: WPT No. 247 of 2023
  • Coram: Justice Rakesh Mohan Pandey
  • Date: 19.10.2023

Link to Download the Order

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