Facts of the Case

M/s Ganpati Infrastructures, a partnership firm, had entered into a contract with Bilaspur Smart City Limited (BSCL) for construction of a road and drain in the Mangla area along the Arpa River, pursuant to a Letter of Award dated 31.03.2022. After the contract was awarded, the GST Council changed the applicable tax rate to 18%, and the contractor claimed entitlement to the resulting difference in GST amount under Clause-C (Taxes, Duties and Statutory Levies) of the agreement, which provided that in case of a change in indirect tax laws, including GST, the benefit would be passed on to the affected party upon submission of a formal request with supporting documents. BSCL rejected the petitioner's representation on 11.04.2023, on the ground that it was not accompanied by supporting documents. The petitioner filed WPC No.4047 of 2023 before the Chhattisgarh High Court, which was decided on 14.09.2023.

Issues Involved

  1. Whether BSCL's rejection of the petitioner's claim for want of supporting documents was arbitrary, given that the GST Council's rate decision was itself a public document.
  2. Whether the petitioner should be permitted to resubmit its claim with the necessary supporting documents for fresh consideration.

Petitioner's Arguments

  • The rejection of the claim for want of documents was arbitrary and unsustainable, since the GST Council's decision changing the tax rate is a public document already known to the respondents, and Clause-C of the agreement obliged BSCL to pass on the benefit of the changed GST rate.
  • The petitioner offered to submit relevant supporting documents and file a fresh representation for the authority's consideration.

Respondent's Arguments

  • BSCL contended that it had considered the petitioner's representation in an objective manner and had rightly rejected it for lack of supporting documentation, as required under Clause-C of the agreement.

Court Order / Findings

  • On perusing Clause-C of the agreement, the Court found that it did contemplate reimbursement of the impact of a change in indirect tax laws (including GST), subject to the contractor submitting a formal request with necessary supporting documents for BSCL's verification.
  • The Court found it appropriate to dispose of the writ petition by permitting the petitioner to submit a fresh representation, enclosing all supporting documents for its claim.
  • BSCL was directed to consider and decide the fresh representation afresh, without prejudice to its earlier decision dated 11.04.2023, preferably within four months of receiving the representation.

Important Clarification

The Court did not rule on whether the petitioner is actually entitled to reimbursement of the GST rate difference — it only ensured that the contractor gets a genuine opportunity to press its claim with proper documentary support, under the price-variation clause already existing in the government works contract. This is a useful illustration of how GST rate-change clauses in public works contracts operate and are enforced.

Sections Involved

  • Central Goods and Services Tax Act, 2017 — change in GST rate pursuant to GST Council decision (as the trigger event under the contract's tax-variation clause)
  • Contractual clause on 'Taxes, Duties and Statutory Levies' in the Smart City works contract (not a standalone statute)

Decision – In Favour of

Disposed of with a procedural direction favourable to the Petitioner, M/s Ganpati Infrastructures — it was allowed to file a fresh, document-supported representation, to be decided afresh by BSCL; the entitlement to reimbursement itself was left open.

Case Details

High Court of Chhattisgarh, Bilaspur | WPC No.4047 of 2023 | Coram: Hon'ble Smt. Justice Rajani Dubey | Date: 14.09.2023.

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