Government Must Reimburse Contractor for GST Rate Differential on State Highway Project Within 45 Days

HC ruled in contractor's favor, mandating government reimburse additional GST rate differential from 12% to 18% for state highway project. Court directed government to allocate budget and pay the differential amount within 45 days, with right to file recovery suit if payment is not made. Writ petition was allowed without imposing costs.

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Issues involved: Contractual dispute regarding GST rate change and reimbursement.

Summary:
The petitioner, a contractor of the State Highways Department, entered into a contract with the government when the GST rate was 12%, which was later increased to 18%. The government did not act upon the change in GST rate, despite the petitioner's representations. The petitioner sought reimbursement for the increased GST rate for works executed after the rate change. The court found the petitioner's claim genuine, stating that the burden of the increased tax rate should be borne by the recipient. The court directed the government to allocate a budget for reimbursing the petitioner and other contractors the differential amount of GST due to the rate increase. The government was ordered to make the payment within 45 days, failing which the petitioner would be entitled to file a suit for recovery. The writ petition was allowed with no costs.

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