Facts of the Case

This is WP(C) No. 29024 of 2023 before the Kerala High Court, filed by T. Mohanan, an electrical contractor who completed electrification work for 'GRFTHS and VHSS Azheekkal', Kannur, for the Kerala State Coastal Area Development Corporation. The petitioner claimed he had remitted GST of Rs.3,17,045.34 on the work, relying on a circular under which the contract-awarding respondents were to bear the GST component, and that despite an assurance to that effect and the passage of more than 1½ years, the respondents had not refunded the GST amount to him. This is a contractual reimbursement dispute over who bears the GST cost of a works contract, not a case interpreting GST law itself.

Issues Involved

  1. Whether the respondents were contractually liable to bear/reimburse the GST component of the work under the applicable circular.
  2. Whether this factual and contractual question could be decided by the High Court in writ jurisdiction under Article 226, or should first be examined by the contracting authority.

Petitioner's Arguments

  • As per the applicable government circular, the contract-awarding respondents were required to bear the GST component of the work, and it was on their assurance that he remitted the GST himself.
  • Despite a notice, the respondents had not refunded the amount even after 1½ years, necessitating the writ petition.

Respondent's Arguments

  • The Standing Counsel for the Corporation submitted that the facts were not as stated by the petitioner, since the schedule of rates for the awarded contract already included the GST component.
  • No representation or legal notice had, in fact, reached the respondents from the petitioner, so there had been no earlier occasion to consider the claim.

Court Order / Findings

  • The Court held that whether the GST component was contractually liable to be returned to the petitioner or was already built into the contract price was a question squarely in the realm of disputed facts, which the writ court could not decide in the first instance under Article 226.
  • The petitioner was given liberty to make a detailed representation, supported by documents, to the competent authority among the respondents within one month.
  • The Corporation was directed to consider and dispose of the representation, after hearing the petitioner, within three months, and if any amount was found payable, to disburse it within a further month.

Important Clarification

The Court did not decide whether GST is, as a matter of law or contract, to be borne by the contractor or the contracting corporation — that remains a factual and contractual question left to the Corporation to examine on the specific documents and schedule of rates. The order provides no GST-law ruling; it is procedural, directing an administrative decision-making process.

Sections Involved

  • Article 226, Constitution of India — writ jurisdiction and its limits over disputed questions of fact
  • Applicable government circular on works-contract rates (administrative instruction, not a specific GST statutory provision)

Decision – In Favour of

Disposed of without a decision on merits — the petitioner was granted liberty to pursue his claim before the Corporation, which was directed to decide it within a time-bound schedule.

Case Details

Court: High Court of Kerala at Ernakulam
Case No.: WP(C) No. 29024 of 2023
Coram: Justice Devan Ramachandran
Date: 19 September 2023

Link to Download the Order

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