2024 (4) TMI 611 - HC - GST

Seeking reimbursement of GST amount paid by the petitioner - Interpretation of Contract Clause - it is submitted that after having realized its mistake, respondent No. 1 not only informed the petitioner that it would not be liable to reimburse the GST but also deducted the GST already paid in favour of the petitioner and as such there is no merit in the petition and the same is liable to be dismissed - HELD THAT - A perusal of the material on record, in particular the cumulative effect of the short term tender notification dated 01.02.2019 containing clause C to note No. 1 which stipulates that GST shall be paid to the tendered amount separately as per Rules and applicable Government Orders and notice to the tender notification as well as the work order and other documents will clearly indicate that the rate quoted by the petitioner was exclusive of GST and did not include the same as contended by respondent No. 1. So also, merely because Clause 36 of the scheduled agreement includes sales tax and VAT, in the absence of any material to show that sales tax and VAT include GST also and that the rates quoted by the petitioner include GST, it is opined that respondent No. 1 is liable to reimburse the GST paid in favour of the petitioner. The respondent is hereby directed to reimburse GST amount as indicated in the representation dated 15.04.2023 vide Annexure-E - The respondent/Department shall reimburse the said amount within a period of six weeks from the date of receipt of copy of this order - petition allowed.

Summary

Issues Involved:
The issues involved in this judgment are the reimbursement of GST amount paid by the petitioner, interpretation of contractual clauses regarding GST payment, and the liability of the respondent to refund the GST amount.

Reimbursement of GST Amount:
The petitioner sought relief to direct the respondent to reimburse the GST amount paid from 24.05.2019 onwards till project completion with 24% interest. The petitioner argued that rates quoted were exclusive of GST, as per the tender notification and work order. The petitioner had paid GST and was reimbursed for four bills, but the respondent refused reimbursement for remaining bills and deducted earlier amounts paid. The court held that the respondent must reimburse the GST paid by the petitioner, as evidenced by the material on record and the contractual terms.

Interpretation of Contractual Clauses:
The respondent contended that the rates quoted by the petitioner should be inclusive of sales tax/VAT, which now refers to GST post-GST regime implementation. The respondent informed the petitioner that it would not reimburse GST and deducted the amount already paid. The court noted that the scheduled agreement clause mentioning sales tax/VAT did not specify inclusion of GST. The court held that the respondent was liable to reimburse the GST paid by the petitioner, as per the contractual terms and the judgment in a similar case.

Liability to Refund GST Amount:
The court referred to a previous judgment where it was held that the respondent, as a service recipient, was duty-bound to reimburse the GST amount to the petitioner, a registered Civil Contractor. The court emphasized that the respondent's inaction in reimbursing the GST amount was unjustified. Citing this precedent, the court directed the respondent to reimburse the GST paid by the petitioner within a specified timeframe, as detailed in Annexure N of the petition.