Contractor Ordered to Resubmit GST Payment Claim, Given Two-Month Window for Detailed Administrative Review of Outstanding Liability

HC mandamus petition addressed GST payment dispute between a contractor and government entity. Court directed petitioner to submit fresh representation regarding outstanding amount and GST liability within two months. The ruling focused on resolving payment issues through administrative channels rather than judicial intervention, providing an opportunity for detailed reassessment of the contractual GST obligations.

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Issues:
Petition for mandamus to pay outstanding amount and GST liability on running bills.

Analysis:

Issue 1: Mandamus to Pay Outstanding Amount
The petitioner, a partnership firm, filed a petition seeking a writ of mandamus to direct the respondents to pay an outstanding amount of Rs. 7,97,88,026.31 along with interest. The petitioner claimed that it had undertaken various works contracts for the respondents and raised running bills, which were paid by the respondents. However, the respondents failed to pay the GST on these bills, leading to a dispute. The petitioner highlighted that prior to the implementation of the GST regime, there were no issues with payments. The Government Order dated 09.11.2017 directed that contracts awarded before the GST regime should also be governed by the GST regime, with the additional tax burden calculated using a specific formula. Despite the petitioner's efforts to address the non-payment issue through representations and requests, the respondents did not disburse the GST amount, resulting in potential tax liability for the petitioner. The court disposed of the petition by directing the petitioner to submit a fresh representation to the concerned authorities for a decision within two months.

Issue 2: GST Liability on Running Bills
The petitioner also sought a mandamus to ensure the payment of GST on the running bills raised for the ongoing contracts. The respondents had been deducting tax at a rate of 2% (1% CGST and 1% SGST) from the payments made to the petitioner, which the petitioner argued was only a partial deduction of the total tax liability. The petitioner emphasized that the running bills were subject to the Government Order of 09.11.2017 and the clarificatory order of 26.10.2021, which outlined the liability for GST payment. Despite multiple requests and representations to the respondents, the petitioner faced challenges in receiving the full payment inclusive of GST. This non-payment of GST led to difficulties for the petitioner in meeting its tax obligations to the GST Department, potentially resulting in recovery proceedings. The court's directive for a fresh representation aimed to address this issue by seeking clarification from the concerned authorities and ensuring a reasoned decision within a specified timeframe.

In conclusion, the judgment addressed the petitioner's grievances regarding non-payment of GST on running bills and outstanding amounts by directing them to make a fresh representation for resolution within two months. The detailed analysis highlighted the legal framework surrounding the GST liability, contractual obligations, and the court's approach to resolving the dispute through administrative channels.

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