Indu Construction Vs Nagpur Improvement Trust (Bombay High Court)
Summary: The Bombay High Court, Nagpur Bench allowed the writ petition filed by M/s Indu Construction and held that the petitioner was entitled to GST reimbursement in respect of an ongoing construction contract awarded before GST came into existence. The petitioner had participated in a tender floated on 02.06.2014 for construction of affordable housing at Nagpur and, being the successful bidder, received the work order on 25.08.2014. The work was completed and a completion certificate was issued.
GST came into force with effect from 01.07.2017 while the work was ongoing. The petitioner subsequently claimed reimbursement of GST against RA Bills Nos. 14 to 29, relying upon the terms of the tender as well as the Government Circular dated 19.09.2017 and Government Resolution dated 21.01.2021. The claim was verified by the respondents through their Chartered Accountant, Rodi Dabir and Company, by certificate dated 28.06.2022, but was subsequently rejected by communication dated 20.12.2022. The respondents relied principally upon Clauses 25 and 48 of the tender and the clarification recorded during the pre-bid meeting that new taxes after award of the contract would be borne by the contractor without reimbursement. The Court held that Clauses 25 and 48 required rates to include applicable taxes but did not address taxes that would be introduced in the future.
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