D.A. Enterprises Vs State of Chhattisgarh (Chhattisgarh High Court)
1. Aggrieved by the order (Annexure P/1) dated 27.08.2020, the present writ petition has been filed.
2. Present is a second around of litigation. The earlier around of litigation was WPT No. 41 of 2020 decided 25.06.2020.
3. Vide the said order, this Court had directed the petitioner to approach the respondent No. 2 by way of a representation and the respondent No. 2 in-turn to take a decision on the representation that the Petitioner has made for refund of the additional tax burden suffered by the petitioner in the light of introduction of the GST regime w.e.f. 1st July, 2017 onwards.
4. The facts in brief is that the petitioner who is otherwise a Contractor taking contracts of civil natures with the respondents, one such NIT was floated by the respondents-Department on 02.02.2017 for different works. The petitioner was found the successful bidder for Nine such work published in the NIT. Nine separate work Orders were issued on 14.06.2017. Nine separate work agreements were executed on the same day i.e. on 14.06.2017.
5. The petitioner-Contractor had quoted the price taking into consideration the tax implication as it then stood, prior to July 2017. The Government of India introduced the Goods and Service Tax Act w.e.f. 01.07.2017. The tax payable under the GST law was 18% as compared to the value added tax and other taxes under the old regime, which comes to roughly 10 to 12 percent. Thus, the Petitioner-Contractor had to incur an additional tax burden in the course of the execution of the work Orders. The Contractors who had received the contracts prior to coming into force of the GST regime, had been agitating before the State Government in-respect-of the additional tax burden that they were faced with in the light of the introduction of the GST Law.
6. The Government of Chhattisgarh had been issuing Orders Department wise taking into consideration the demands so raised by the Contractors. The Orders that were passed by the State Government for the Public Works Department in-respect-of the said issue was dated 10.10.2018 (Annexure P/4). The relevant portion of which is being reproduced here-in-under:-
7. Similar Order was again issued by the Rural Road Development Agency under the Government of Chhattisgarh (Annexure-P/5) dated 26.09.2019. The relevant portion of this order dated 26.09.2019 is reproduced here-in-under:-
“17. GST shall be applicable as per Govt, of India & govt. of C.G. Amount of GST not included in BOQ. GST as applicable time to time will be paid to the Contractor during payment of running/final bills as rate quoted by Contractor.”
8. There was a similar order issued under the Urban Administration Department on 21.12.2017 (Annexure P/14), wherein also the Government had passed an order of similar nature Annexure P/14 of the said writ petition, which for ready reference is being reproduced here-in-under:-
be deemed to be inclusive of the sales and other levies, duties, royalties, cess, toll taxes of central and State Governments, local bodies and authorities that the Contractor will have to pay for the performance of this contract. The Govt. will perform such duties in regard to the deduction of such taxes at the source as per applicable law. However, if “Service Tax” and cess on service tax or any other “New Tax” (not increase or decrease in existing place, duties, surcharge, accept royalty on minor mineral) is levied on the Contractor either by Central Govt. or State Govt. then the Commissioner / Chief Municipal Officer shall reimburse the” Service Tax” and cess on service tax and or “ New Tax” amount: on submission of proof of such payment by the Contractor
9. It was in these contexts that the petitioner had filed the earlier around of litigation i.e. WPT No. 41/2020, which got disposed of on 25.06.2020 for an appropriate decision in respect of the petitioner who had got the work Orders before coming into force of the GST law. However, the Respondent-authorities vide impugned order (Annexure P/1) dated 27.08.2020 has refused to accept the request of the petitioner for refund of the additional tax burden primarily on the ground that the terms of the contract at the time of the execution of the work, did not provide for any such conditions of reimbursement. That in the said contract, the burden of payment of tax was that on the Contractor. For ready reference, the relevant portion of the order passed by the Respondents rejecting the claim of the petitioner vide the impugned order is as under:-
10. A development that has subsequently transpired recently is that the Water Resources Department of the Government of Chhattisgarh itself now vide order dated 30.09.2022 has amended the terms and conditions of the contract and has amended the clause 2.17.1. For ready reference of Clause 2.17.1 and its amended portion is under:-
