Facts of the Case

This dispute is about interpreting a contractual clause on tax changes, not about the GST law itself. Ganpati Infrastructures had contracted with Bilaspur Smart City Limited (BSCL) for design, engineering, supply, installation and maintenance of grid-connected rooftop solar photovoltaic plants, under a Letter of Acceptance dated 06.07.2022. After the contract was entered into, the GST Council's decision raised the applicable GST rate to 18%, and the petitioner claimed the difference under Clause-C ('Taxes, Duties and Statutory Levies') of the agreement, which provides that in case of a change in indirect tax laws (including GST law), the benefit is to be passed on and incorporated into invoices, subject to the contractor submitting a formal request with supporting documents for verification by BSCL. BSCL rejected the petitioner's claim on 11.04.2023 for want of supporting documents.

Issues Involved

  1. Whether BSCL was justified in rejecting the petitioner's claim for the differential GST amount solely for lack of supporting documents, when the underlying GST Council decision was itself a public document.

Petitioner's Arguments

  • The claim was based on a decision of the GST Council, which is a public document already within the knowledge of the respondents, so rejecting the claim purely for lack of 'supporting documents' was arbitrary and unsustainable.
  • Under Clause-C of the contract, BSCL was liable to incorporate the GST rate change into the contract value, and the petitioner was willing to submit fresh, complete documentation in support of its claim.

Respondent's Arguments

  • The respondents had considered the petitioner's representation in an objective manner and rightly rejected it for lack of supporting documents to verify and quantify the claimed benefit.

Court Order / Findings

  • The Court examined Clause-C of the agreement, which required the contractor to submit a formal request with necessary supporting documents for BSCL to verify before incorporating any tax-law change into the contract value.
  • Noting that the earlier rejection was on the specific ground of missing supporting documents, the Court found it appropriate to permit the petitioner to submit a fresh representation with all supporting documents.
  • The writ petition was disposed of directing the respondents to consider and decide the fresh representation afresh, without prejudice to their earlier decision, within four months from receipt.

Important Clarification

The Court did not decide whether the GST rate increase in fact entitled the petitioner to a higher contract payment, or interpret Clause-C's scope in any binding way — it merely gave the contractor another chance to make its case with proper documents, leaving the substantive question to the authority's fresh decision.

Sections Involved

  • Contract clause on 'Taxes, Duties and Statutory Levies' — pass-through of GST law changes (a contractual, not statutory, provision)
  • Constitution of India — Article 226

Decision – In Favour of

Disposed of without a decision on the merits of the GST rate-change claim; the petitioner was permitted to make a fresh, better-documented representation for the authority to decide.

Case Details

Court: High Court of Chhattisgarh, Bilaspur  |  Case No.: WPC No. 4036 of 2023  |  Coram: Hon'ble Shri Justice Parth Prateem Sahu  |  Date: 12 September 2023

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