Water Resources Department ordered to consider assessee's representation for refund of additional GST

[CA Bimal Jain]

The Hon’ble Chhattisgarh High Court in the matter of CG ASSOCIATES, VERSUS STATE OF CHHATTISGARH, CHIEF ENGINEER, MAHANADI GODAWARI BASIN WATER RESOURCES CHHATTISGARH. SUPERINTENDING ENGINEER, WATER RESOURCES DEPARTMENT, EXECUTIVE ENGINEER, WATER RESOURCES DIVISION, BEMETARA  - 2023 (1) TMI 790 - CHHATTISGARH HIGH COURT has directed the Water Resources Department to take into consideration the Representation filed by the CG Associates w.r.t the refund of the additional amount of Goods and Service Tax (“GST”) paid by the CG Associates due to the change in the rate of taxes.

Facts:

M/s CG Associates (“the Petitioner”) filed writ petition seeking the reimbursement of the additional tax from the Water Resources Department (“the Department”). The Petitioner contended that a work order was issued by the Department dated April 25, 2022, wherein the rate of GST payable was 12%. However, on July 18, 2022 the rate of the GST was enhanced from 12% to 18% because of which Petitioner had to pay the GST at the enhanced rate.

The Petitioner placed his contentions of seeking refund on the ground  that as per the amended Clause 2.17.1 of the Agreement, amended by the Department itself on September 30, 2022, any other new tax or levy or cess as imposed by statute or any deviation in the existing royalty/tax/levy/GST after the last stipulated date for the receipt of the tender including extensions, if any, would  be treated as new tax and the same would be paid by the Petitioner, however, the Engineer in Charge of the Department would reimburse such new tax to the Petitioner on submission of proof. Further, in the event of reduction is the tax rate, the Petitioner would reimburse the said amount to the State Government.

Since, there was an increase in the GST rate, the same must be reimburse by the Department as per the Clause 2.17.1 of the Agreement.

The Petitioner also stated that it had filed a detailed Representation before the Respondents dated November 6, 2022 and the Respondents are yet to decide upon the same.

Issue:

Whether the Petitioner is entitled for reimbursement of additional tax paid?

Held:

The Hon’ble Chhattisgarh High Court in CG ASSOCIATES, VERSUS STATE OF CHHATTISGARH, CHIEF ENGINEER, MAHANADI GODAWARI BASIN WATER RESOURCES CHHATTISGARH. SUPERINTENDING ENGINEER, WATER RESOURCES DEPARTMENT, EXECUTIVE ENGINEER, WATER RESOURCES DIVISION, BEMETARA  - 2023 (1) TMI 790 - CHHATTISGARH HIGH COURT has held as under:

• The Respondents did not oppose the Petitioner’s prayer to consider the Representation filed.
• Directed the Respondents to consider and decide the Representation filed by the Petitioner within 90 days.
• Permitted the Petitioner to make a fresh Representation to the Respondents with supporting proof showing the additional tax liability incurred by the Petitioner to facilitate the decision-making.
• Further directed the Respondents to take steps to reimburse the amount paid as additional tax.

(Author can be reached at [email protected])