Facts of the Case

M/s Om Sakthi Construction had executed road improvement works for the National Highways Department under Agreement No.30/2017-2018 dated 26.07.2017, for stretches of the Athur-Perambalur Road. It sought a writ of mandamus directing the Divisional Engineer, National Highways Department, to pay it GST in respect of that agreement, as contemplated under G.O.Ms.No.296, Finance (Salaries) Department, dated 09.10.2017, by considering its representation dated 13.12.2022. On instructions, the respondents informed the Court that the claim would be considered once clearance was obtained from the jurisdictional GST/Central Excise Commissionerate, for which instructions had already been circulated on 19.09.2023.

Issues Involved

  1. Whether the contractor was entitled to a direction compelling the National Highways Department to pay/reimburse GST on the works contract.
  2. Whether the pending representation ought to be considered in light of the Government Order and the department's own subsequent instructions.

Petitioner's Arguments

  • The National Highways Department should be directed to pay GST due under the 2017 agreement, in line with the applicable Government Order, by considering the petitioner's pending representation.

Respondent's Arguments

  • The claim would be considered, but only after obtaining the necessary clearance from the GST/Central Excise Commissionerate, in line with instructions already circulated on 19.09.2023.

Court Order / Findings

  • The Court held that the petitioner's claim ought to be considered.
  • The respondents were directed to examine the representation dated 13.12.2022 in light of the Government Order dated 09.10.2017 and the instructions dated 19.09.2023, completing the exercise within three months.
  • The writ petition was allowed to that extent, with no costs.

Important Clarification

The Court did not itself determine whether GST reimbursement was actually due or the amount payable; it only directed the department to complete its own consideration process within a fixed timeline. Government contractors awaiting GST reimbursement on works contracts should note that inter-departmental clearance is often a precondition the executing department will insist on before releasing payment.

Sections Involved

  • Central Goods and Services Tax Act, 2017 (reimbursement of GST component in a government works contract)
  • Government Order: G.O.Ms.No.296, Finance (Salaries) Department, dated 09.10.2017

Decision – In Favour of

Petitioner (M/s. Om Sakthi Construction) – the writ petition was allowed, directing the department to consider and decide the GST reimbursement claim within three months.

Case Details

Court: Madurai Bench of Madras High Court
Case Number: W.P.(MD).No. 22749 of 2023 and W.M.P.(MD)No. 19006 of 2023
Coram: Justice S. Srimathy
Date of Order: 19 September 2023

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