While directing the State authorities to maintain the status quo on the issue of reimbursement of additional tax paid by the construction companies, the Chhattisgarh High Court concurred with the opinion of the High Court in the case of Deputy Commissioner of Income Tax vs Pepsi Foods Limited [(2021) 7 SCC 413], wherein it was held that “action on the part of the Respondents in rejecting the claim application is one, which would be hit by Article 14 of the constitution of India for the reason that in the event of a Contractor having contract with the various Department of the Government, he gets the reimbursement of the additional tax liability from all other Departments except for one, thus it would be arbitrary and discriminatory”.

A Bench of Justice Rajani Dubey therefore, directed the Petitioners (construction companies) to make a fresh claim before the Respondent (Revenue authorities) agitating their grievance, and upon a such claim being made, the Respondent authorities shall proceed ahead with the necessary scrutiny and enquiry and thereafter if the Petitioners are found entitled to be reimbursed the additional tax liability incurred upon them, they will suitably be reimbursed.

Senior Advocate Arvind P. Datar appeared for the Petitioners and Advocate Tushar Dhar Diwan as well as Additional AG Chandresh Shrivastava appeared for the Respondents.

In a nutshell, the Petitioners company were involved in the construction of road, bridges, tolls, etc, and were awarded works contracts at different point in time. The main grievance of the Petitioners was against the inaction on the part of the Respondent State Authorities in not granting refund/ reimbursement of 6% additional GST liability imposed upon them w.e.f. July 18, 2022, on the works contract being executed by the Petitioners, even though the contract between the parties was signed prior to July 18, 2022, and the tender was submitted and accepted by the Respondent authorities with a 12% rate of GST liability at the relevant point of time.

After considering the submissions, the High Court found from the documents submitted by the Petitioners that some of the departments of the State Government of Chhattisgarh have accepted such claim of the contractors where certain additional burden of money was incurred upon them after coming into force of the GST.

In the similar nature of case, this Court vide order dated Nov 17, 2022 passed in WPT No.94/2020 directed the petitioner therein to make a fresh claim showing the difference of tax liability that was incurred at the time of submission of bids and the excess tax paid by him in the light of the introduction of the GST and upon such claim being made, the respondents were directed to forthwith process the same and after due scrutiny and enquiry, the petitioner therein be suitably reimbursed the additional tax burden incurred by him”, added the Court.

Therefore, keeping in view the fact that present cases are not distinguishable from that passed in WPT No.94/2020, the High Court directed the Petitioners to follow the process, as has been directed/observed in the said writ petition.

Cause Title: M/s Surana & Company and Ors. v. Union of India and Ors.

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