2022 (2) TMI 1330 - HC - GST

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

The HC directed the government authority to review and decide on the contractor's representations regarding GST reimbursement under CPWD contracts within ... Reimbursement of GST - General Conditions of Contract Clause 38 - model calculation sheet for reimbursement - representation for administrative reconsideration - time bound consideration by competent authority - opportunity of hearing before decision - judicial direction to refer to competent authorityReimbursement of GST - model calculation sheet for reimbursement - representation for administrative reconsideration - time bound consideration by competent authority - opportunity of hearing before decision - Petitioner's representations challenging the methodology in the CPWD model calculation sheet for reimbursement of GST shall be forwarded to and considered by the competent authority and decided in a time bound manner with an opportunity of hearing, including consideration of the correctness of the rough calculation sheet (Ext.P6). - HELD THAT: - The High Court observed that the petitioner, a contractor claiming reimbursement of GST under the CPWD General Conditions of Contract (Clause 38), pointed out material anomalies in the model calculation sheet introduced by the respondents' office memorandum/circular and submitted representations (Ext.P7 and Ext.P8). Finding a patent irregularity that warrants earnest application of mind, the Court directed the first respondent to forward the representations to the second respondent (the competent authority) within two weeks. The Court commanded the second respondent to consider and pass appropriate orders on Ext.P7 and Ext.P8 expeditiously and in any event within three months of receipt of the judgment, to grant the petitioner an opportunity of hearing before taking a decision, and to examine the correctness or otherwise of the rough calculation sheet produced as Ext.P6. The writ petition was disposed by issuing these directions rather than adjudicating the substantive claim on merits.First respondent to forward the representations to the second respondent within two weeks; second respondent to decide on Ext.P7 and Ext.P8 within three months after receipt, after hearing the petitioner and considering Ext.P6.Final Conclusion: Writ petition disposed by directing administrative reconsideration: the first respondent to forward the petitioner's representations to the competent authority and the competent authority to decide them within a stipulated timeframe after hearing the petitioner and examining the contested model calculation sheet. 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.