2022 (2) TMI 1330 - HC - GST

GST Reimbursement Dispute: Contractor Challenges CPWD Circular's Calculation Methodology Under Clause 38

VRIDDHI INFRATECH INDIA PVT. LTD. Versus THE EXECUTIVE ENGINEER CENTRAL PUBLIC WORKS DEPARTMENT (CPWD), THIRUVANANTHAPURAM AND DIRECTOR GENERAL CENTRAL PUBLIC WORKS DEPARTMENT (CPWD), NEW DELHI

The HC directed the government authority to review and decide on the contractor's representations regarding GST reimbursement under CPWD contracts within ... Reimbursement of taxes due to the petitioner under the goods and service tax - HELD THAT:- Having regard to the nature of anomalies pointed out by the petitioner, this Court is of the opinion that a serious consideration ought to be made by the competent amongst the respondents to the anomalies pointed out by the petitioner. As apparently, there is a patent irregularity, which may require an earnest application of mind on the part of the respondents while considering the representation of the petitioner. This writ petition can be disposed of - there will be a direction to the 2nd respondent to consider and pass appropriate orders on Ext.P7 and Ext.P8 representations, as expeditiously as possible, at any rate, within a period of three months from the date of receipt of a copy this judgment. The petitioner shall also be granted an oppotunity of hearing, before a decision, as directed, is taken. Issues: Reimbursement of taxes under GST based on CPWD General Conditions of Contract (GCC) and CircularsAnalysis:The petitioner, a contractor engaged in construction works for the Central Public Works Department (CPWD), filed a writ petition seeking reimbursement of GST levied after receipt of tenders. The petitioner claimed entitlement to reimbursement based on Clause 38 of the CPWD General Conditions of Contract (GCC). The petitioner highlighted discrepancies in the methodology of calculating compensation for reimbursement introduced through an office memorandum/circular dated 29.09.2020. The petitioner pointed out significant errors in the model calculation sheet attached to the circular, emphasizing potential adverse impacts on contractors, including the petitioner. The Court acknowledged the seriousness of the anomalies raised by the petitioner and stressed the need for a thorough review by the competent authorities to address the irregularities effectively. Consequently, the Court directed the consideration of representations submitted by the petitioner to the 1st respondent, emphasizing a time-bound resolution.The Court, after considering the arguments presented by the petitioner's counsel and the Assistant Solicitor General of India, decided to dispose of the writ petition by directing the competent authority (2nd respondent) to promptly review and decide on the representations (Ext.P7 and Ext.P8) within three months from the date of the judgment. The Court also mandated that the petitioner be given an opportunity for a hearing before a final decision is made. Additionally, the correctness of the rough calculation sheet (Ext.P6) provided by the petitioner was to be evaluated during the decision-making process. The Court emphasized the need for expeditious resolution of the matter, ensuring that the reimbursement issues were addressed promptly and fairly. Ultimately, the Court disposed of the writ petition, setting forth clear directives for the 2nd respondent to follow in resolving the reimbursement claims under GST for the petitioner and other contractors affected by the anomalies in the calculation methodology.