Facts of the Case

Noble Tech Engineering (P) Limited had entered into a works contract with the Kerala Water Authority (KWA), evidenced by a Memo of Work Tendered dated 03.10.2019 and a Work Agreement dated 31.10.2019. During execution of the contract, there was a revision in the applicable GST rate, resulting in the petitioner paying a higher, differential GST amount than originally factored into the contract price. The petitioner claimed this differential GST ought to be reimbursed by KWA but the Authority had not reimbursed it. The petitioner filed a representation (Ext.P3) dated 27.10.2022 before the Executive Engineer, JNNURM Project Division, KWA, and, on it remaining undecided, approached the Kerala High Court seeking a direction for its early disposal and disbursal of the eligible amount.

Issues Involved

  1. Whether the petitioner was entitled to reimbursement of differential GST arising from a mid-contract rate revision.
  2. What procedure should govern disposal of the petitioner's pending representation before the Kerala Water Authority.

Petitioner's Arguments

  • A revision of GST occurred during the currency of the works contract with KWA, and the resulting differential GST amount paid by the petitioner had not been reimbursed.
  • The petitioner's representation (Ext.P3) seeking reimbursement had remained undisposed, warranting a direction from the Court for its early and time-bound disposal.

Respondent's Arguments

  • The Kerala Water Authority's Standing Counsel submitted that if the petitioner produced evidence of actual payment of the differential GST, the Authority would consider and dispose of the representation (Ext.P3) after hearing the petitioner.
  • The Authority requested that the Court not make any affirmative declaration in the petitioner's favour, and instead leave the decision to the Authority itself, to be taken in accordance with law.

Court Order / Findings

  • The Court allowed the writ petition to the limited extent of directing the petitioner to produce documents establishing payment of the differential GST, within one month of the judgment.
  • On such production, the KWA was directed to take up and decide the pending representation (Ext.P3) after hearing the petitioner, within a further one month.
  • If the petitioner was found entitled to any amount towards differential GST, KWA was directed to disburse it within one further month.
  • The Court made no finding on whether the petitioner was in fact entitled to reimbursement — that determination was left entirely to the Authority.

Important Clarification

This order does not decide the substantive question of whether contractors executing government works contracts are entitled to reimbursement of a GST rate increase occurring mid-contract — a question that recurs frequently in public-works GST disputes. It only sets a time-bound procedure for the Kerala Water Authority to examine the claim on its merits, contingent on the contractor first proving actual payment of the differential tax. Contractors relying on this case should understand it as procedural relief only, not as authority establishing a right to reimbursement.

Sections Involved

  • Central Goods and Services Tax Act, 2017 / Kerala State Goods and Services Tax Act, 2017 (rate revision giving rise to the differential GST, not separately analysed)
  • Article 226, Constitution of India (writ jurisdiction)

Decision – In Favour of

Disposed of without a decision on the merits of the reimbursement claim — the writ petition was allowed only to the extent of directing a time-bound administrative decision by the Kerala Water Authority.

Case Details

  • Court: High Court of Kerala at Ernakulam
  • Case No.: WP(C) No.40554 of 2022
  • Coram: Hon'ble Mr. Justice Devan Ramachandran
  • Date of Judgment: 06.10.2023

Link to Download the Order

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