Facts of the Case

M/s Ganpati Infrastructures, a Raipur-based contractor, had entered into a contract with Bilaspur Smart City Limited (BSCL) for the “Beautification & Development of Minimata Talab, Talapara,” including its operation and maintenance on an annual fee basis, pursuant to a Letter of Acceptance dated 26.03.2022. After the contract was signed, the GST Council revised the applicable tax rate upward to 18%. The petitioner claimed it was entitled to the difference in GST under Clause C of the “Taxes, Duties and Statutory Levies” head of the agreement, which required the benefit of any change in indirect tax laws, including GST, to be passed on to the affected party once supporting documents were furnished. BSCL rejected the claim on 11.04.2023 on the ground that the petitioner had not enclosed supporting documents for its claim.

Issues Involved

  1. Whether BSCL's rejection of the GST rate-differential claim for want of supporting documents was arbitrary, given that the change in GST rate was a public decision of the GST Council.
  2. Whether the petitioner should be permitted to resubmit its claim with supporting documents.

Petitioner's Arguments

  • The GST Council's decision to revise the tax rate is a public document already within the knowledge of BSCL, so rejecting the claim purely for lack of enclosed documents was arbitrary and unsustainable.
  • Clause C of the agreement obliged BSCL to pass on the benefit of any GST rate change.
  • The petitioner was willing to submit fresh supporting documents and sought a direction for BSCL to reconsider the claim.

Respondent's Arguments

  • BSCL, through State counsel, submitted that the representation had already been considered objectively and rejected correctly for lack of supporting material.

Court Order / Findings

  • The Court examined Clause C of the agreement, which requires a formal request with necessary supporting documents before any GST-related benefit is incorporated into invoices.
  • Noting that the earlier rejection was specifically on the ground of missing documents, the Court permitted the petitioner to submit a fresh, fully-documented representation.
  • BSCL was directed to consider and decide the fresh representation afresh, without prejudice to its earlier decision, within four months.
  • The writ petition was finally disposed of without the Court itself ruling on whether the GST rate increase was actually payable by BSCL.

Important Clarification

The High Court did not decide the substantive question of whether the contractor was entitled to the GST rate-differential — it only found that the rejection for want of documents could be revisited if proper documents were filed. Contractors facing a similar “change in law” clause for GST rate revisions should ensure that any representation is accompanied by the GST Council's notification or minutes and clear computation of the differential, since courts are reluctant to adjudicate contractual tax-pass-through disputes on merits at the writ stage.

Sections Involved

  • Central Goods and Services Tax Act, 2017 — the GST rate revision by the GST Council formed the factual basis of the contractual claim, though no specific statutory provision was interpreted by the Court.
  • Clause C, Article on Taxes, Duties and Statutory Levies of the License/Works Agreement between the parties.

Decision – In Favour of

The writ petition was disposed of without a decision on merits — the petitioner was given liberty to file a fresh, document-backed representation, which BSCL must decide afresh; neither side's substantive claim was upheld or rejected by the Court.

Case Details

Court: High Court of Chhattisgarh, Bilaspur
Case No.: WPC No. 4044 of 2023
Coram: Justice Parth Prateem Sahu
Date of Order: 12.09.2023

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