Facts of the Case

Triveni Engicons Private Ltd. was awarded a works contract by the Water Resources Department, Government of Jharkhand (Agreement No. 03/SBD/2018-19 dated 08.03.2019) for construction of earthwork, lining and a service road on the Kharkari Right Main Canal. The petitioner's case was that although its bills related partly to work executed prior to the GST regime, it was subsequently saddled with GST liability at 12% pursuant to Notification No. 3/2022-Central Tax (Rate) dated 13.07.2022, which changed the applicable rate from 12% to 18%. The petitioner sought reimbursement of the additional GST burden and had filed a representation dated 07.03.2023 before the Superintending Engineer, Kharkhai Canal Circle, which remained undecided, prompting this writ petition.

Issues Involved

  1. Whether the department should be directed to consider and decide the petitioner's pending representation seeking reimbursement of the additional GST burden arising from the rate-change notification.

Petitioner's Arguments

  • Prior to GST, the contract embedded liability for excise duty, central sales tax and VAT; after GST's implementation, the petitioner became liable to GST at rates including 12%, which needed to be reimbursed to the extent it was already embedded in the contract price.
  • Due to the change in tax rate under Notification No. 3/2022-Central Tax (Rate), the petitioner had filed a representation for reimbursement of the additional tax burden, which the department had not acted upon.

Respondent's Arguments

  • No specific opposing submissions on behalf of the State are recorded in this order; the disposal proceeded on the limited relief sought by the petitioner.

Court Order / Findings

  • In view of the limited prayer made — a direction to decide the pending representation — the Court disposed of the writ application with liberty to the petitioner to file a fresh, detailed representation setting out its claim before the Superintending Engineer within three weeks.
  • The department was directed to consider such representation, if filed, and pass a reasoned and speaking order within four weeks of its submission.
  • The Court did not itself examine or decide whether the petitioner was entitled to reimbursement of the additional GST burden — that determination was left entirely to the department.

Important Clarification

This order does not decide whether contractors are entitled to reimbursement when a GST rate-notification increases their tax liability mid-contract — a question of real commercial importance in the works-contract sector — it merely directs the department to consider such a claim and pass a reasoned order. Contractors facing similar rate-change burdens should note that courts are, at this stage, requiring a fresh, well-documented representation rather than deciding entitlement themselves; the department's reasoned order, once passed, would be the actual determination on merits.

Sections Involved

  • Notification No. 3/2022-Central Tax (Rate) dated 13.07.2022 — revision of GST rate applicable to specified works-contract services (from 12% to 18%).
  • Central Goods and Services Tax Act, 2017 — general framework governing the tax liability on the works contract.

Decision – In Favour of

Disposed of without a decision on merits — the department was directed to consider a fresh representation and pass a reasoned order; the petitioner's entitlement to reimbursement remains undecided by the Court.

Case Details

  • Court: High Court of Jharkhand at Ranchi
  • Case No.: W.P.(T) No. 3302 of 2023
  • Coram: Hon'ble Mr. Justice Rongon Mukhopadhyay and Hon'ble Mr. Justice Deepak Roshan
  • Date of Order: 4 July 2023

Link to Download the Order

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