State of Chhattisgarh Vs D.A. Enterprises (Chhattisgarh High Court)
In this case before the Chhattisgarh High Court, the State of Chhattisgarh challenged the order of a learned Single Judge directing reimbursement of GST liability to a contractor in relation to works contracts executed for the Water Resources Department.
The dispute arose from item rate tenders issued on 02.02.2017 for civil works under the Maniyari Tank Scheme, Padampur Tank Scheme, and Agar Diversion Scheme at Mungeli. The contractor was declared successful bidder and agreements along with work orders were executed on 14.06.2017. Under clause 2.17.1 of the contract, all taxes including sales tax, octroi duties, and other levies on the contractor’s work were payable by the contractor.
Subsequently, the Central Goods and Services Tax Act, 2017 came into force with effect from 01.07.2017. The contractor submitted representations on 23.08.2019 and 04.10.2019 seeking reimbursement of 12% GST amounting to Rs.1,85,64,264 on the ground that GST was not in existence when the agreements were executed. Since the representations were not decided, the contractor earlier approached the High Court, which directed the competent authority to decide the representation. The State thereafter rejected the claim on 27.08.2020 holding that the contract clearly required the contractor to bear all taxes and contained no provision for GST reimbursement.
