2025 (1) TMI 888 - HC - GST

Maintainability of petition - availability of alternative remedy - Seeking to release the admitted liability towards the difference of GST amount - interest on the delayed payment of the GST difference - HELD THAT - Reliance placed on an order Division Bench of this Court in M/S APEX STRUCTURE PVT. LTD. THROUGH ITS POWER OF ATTORNEY HOLDER NEELABH SUGANDHI VERSUS STATE OF M.P. AND OTHERS 2024 (12) TMI 928 - MADHYA PRADESH HIGH COURT wherein it is observed ' respondent No.2 is directed to pay the difference of GST amount to the petitioner @ 6% from 01.01.2022 to 30.09.2022 with a period of three months from the date of receipt of certified copy of this order, failing which the petitioner shall be entitled for interest @ 6% per annum from the date of entitlement.' Conclusion - The petitioner is entitled to reimbursement of the additional GST amount and interest on delayed payments. The writ petition is maintainable despite the presence of an arbitration clause. Petition disposed off.

2024 (12) TMI 928 - HC

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

Whether the petitioner is entitled to the reimbursement of the additional GST amount paid due to the increase in the GST rate from 12% to 18% as per the applicable notifications.
Whether the petitioner is entitled to interest on the delayed payment of the GST difference.
Whether the writ petition is maintainable in the presence of an alternative remedy under the Arbitration Act.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Reimbursement of Additional GST Amount

Relevant Legal Framework and Precedents: The Goods and Services Tax Act (GST Act) and the applicable notifications, particularly Notification No.24/2017 CT(R) and Notification No.15/2021 CT(R), which altered the GST rate from 12% to 18%.
Court's Interpretation and Reasoning: The court noted that the petitioner was contractually obligated to pay GST on the services rendered. The increase in GST from 12% to 18% was acknowledged by both parties, and respondent No.2 admitted liability for the additional 6% GST.
Key Evidence and Findings: The petitioner provided evidence of payment of GST at the increased rate, and respondent No.2's letter dated 26.09.2022, which accepted the liability for the additional GST amount.
Application of Law to Facts: The court applied the GST notifications to the contractual obligations between the parties, concluding that the petitioner was entitled to reimbursement of the additional GST paid.
Treatment of Competing Arguments: The respondents argued the availability of an alternative remedy under the Arbitration Act, but the court dismissed this objection, citing the absence of disputed facts.
Conclusions: The court directed respondent No.2 to pay the GST difference to the petitioner within three months, failing which interest would be applicable.

Issue 2: Entitlement to Interest on Delayed Payment

Relevant Legal Framework and Precedents: The court considered general principles of contract law and the specific terms of the agreement between the parties regarding payment obligations.
Court's Interpretation and Reasoning: The court reasoned that the petitioner should not suffer due to the delay in payment of the admitted liability by respondent No.2.
Key Evidence and Findings: The admission by respondent No.2 of the liability and the delay in payment justified the imposition of interest.
Application of Law to Facts: The court applied equitable principles to award interest at 6% per annum from the date of entitlement if the payment was not made within the stipulated time.
Treatment of Competing Arguments: The respondents did not provide a substantial counter-argument against the imposition of interest.
Conclusions: The court concluded that interest was warranted on the delayed payment to ensure fairness to the petitioner.

Issue 3: Maintainability of Writ Petition

Relevant Legal Framework and Precedents: Article 226 of the Constitution of India and the principles governing the maintainability of writ petitions in the presence of alternative remedies.
Court's Interpretation and Reasoning: The court found that since there were no disputed facts, the writ petition was maintainable despite the existence of an alternative remedy.
Key Evidence and Findings: The absence of factual disputes and the admission of liability by respondent No.2 supported the maintainability of the writ petition.
Application of Law to Facts: The court applied principles allowing writ jurisdiction in cases where alternative remedies are not efficacious or where the facts are undisputed.
Treatment of Competing Arguments: The respondents' objection regarding alternative remedies was dismissed as baseless.
Conclusions: The court held that the writ petition was maintainable and proceeded to decide on the merits.

3. SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning: "In view of the above, respondent No.2 is directed to pay the difference of GST amount to the petitioner @ 6% from 01.01.2022 to 30.09.2022 with a period of three months from the date of receipt of certified copy of this order, failing which the petitioner shall be entitled for interest @ 6% per annum from the date of entitlement."
Core Principles Established: The court reinforced the principle that admitted liabilities must be paid promptly, and delays in payment can attract interest. It also reiterated that writ jurisdiction can be invoked in the absence of disputed facts, even if alternative remedies exist.
Final Determinations on Each Issue: The petitioner is entitled to reimbursement of the additional GST amount and interest on delayed payments. The writ petition is maintainable despite the presence of an arbitration clause.

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