Retrospective Revision of GST Reimbursement Rates Requires Reconsideration.
Issue: Whether a retrospective revision of normative rates for GST reimbursement in a coal transportation contract can justify deductions from payments already made based on previously agreed rates.
Facts:
- The assessee, a coal transportation company, was awarded a contract on December 28, 2015.
- The assessee was paid for coal transportation based on the normative rates applicable at the time of service.
- In 2023, new normative rates were fixed, with retrospective application from 2018.
- Based on these revised rates, the respondents deducted amounts previously paid to the assessee under the earlier rates.
- The assessee sought to submit a representation to the respondent authorities and requested a directive for a timely decision.
- The respondents had no objection to the assessee’s request for a direction to decide the representation.
Decision:
- The court disposed of the writ petition, directing the assessee to submit a fresh representation to the concerned authorities.
- The authorities were instructed to decide the representation in accordance with the law.
- The court ruled in favor of the assessee, by directing the respondents to consider the representation.
Key Takeaways:
- Retrospective application of revised normative rates for GST reimbursement can lead to disputes regarding previously settled payments.
- The court emphasized the need for a fair and legal process in addressing such disputes, through the submission and consideration of representations.
- The case highlights the importance of clear contractual terms and timely communication regarding any changes in applicable rates.
- Section 14 of Central Goods and Services Tax Act, 2017/ Chhattisgarh Goods and Services Tax Act, 2017 applied to this case.
HIGH COURT OF CHHATTISGARH
Firstmove Logistics (P.) Ltd.
v.
Union of India
Bibhu Datta Guru, J.
WPC No. 59 of 2024
FEBRUARY 7, 2025
Amrito Das, Adv. for the Petitioner. Ms. Anmol Sharma, Central Govt. Counsel and Vaibhav Shukla, Adv. for the Respondent.
ORDER
Heard.
1. Petitioner has filed this petition seeking following relief (s) :-
“10.1 That, this Hon’ble Court may kindly be pleased to call for the entire record pertaining to the illegal deductions made by the respondents from the payments due to be made to the petitioner from the respondents for its kind perusal.
10. 2 That, this Hon’ble Court may kindly be pleased to issue an appropriate writ quashing and setting aside Clause 5 as contained in the order dated 17/01/2023 as was resolved in the 158th Meeting of the Committee of Functional Directors (CoFD) of SECL on 14/01/2023 (ANNEXURE P-1).
10. 3 That, this Hon’ble Court may kindly be pleased to issue an appropriate writ quashing and setting aside the order dated 04/07/2023 passed by the Deputy Manager (Finance), Gevra Project, SECL (ANNEXURE P-2).
10. 4 That, this Hon’ble Court may kindly be pleased to issue an appropriate writ directing the respondents to appropriately recompute the normative rate after taking into consideration the GST component which was illegally excluded by the respondents.
10. 5 That, this Hon’ble Court may kindly be pleased to pass an appropriate writ declaring that the petitioner ESM company is entitled for payment in accordance with the rate as prescribed under the MoU (at normative rate) for the incomplete / left over work (by the civilian contractor) executed by them.
10. 6 That, this Hon’ble Court may kindly be pleased to pass an appropriate writ directing the respondent authorities to make payment to the petitioner for the civilian work executed by them at the finally determined normative rate, with interest at the rate of 12% from the date the payment was due till the date of actual payment.
10. 7 Any other relief, which this Hon’ble Court, may deem fit and proper, in the facts and circumstances of the case.
2. Learned counsel for petitioner submits that petitioner is registered as Coal Transportation Company and engaged in the business of transportation of coal. Pursuant to the agreement dated 28.12.2015, petitioner was awarded work for transportation of coal. Petitioner continued to transport coal pursuant to the agreement dated 28.12.2015. He contended that as per agreement, rate of transportation is based on the normative rates. Though petitioner was being paid at normative rates fixed time to time by respondents, last normative rates were fixed in the year 2023 and it has been made applicable from 2018. Based on the rate fixed in the year 2023, now respondents have deducted the amount, which has been earlier paid to petitioner pursuant to the earlier normative rate fixed, which is arbitrary and illegal. He submits that petitioner will submit a representation before the respondent authorities and a direction be issued to them to take decision within specified time.
3. Learned counsel for respondents No. 3 to 6 submits that as petitioner is not pressing this petition on merits and only seeking a direction to the respondents authorities to take decision on the representation, he is having no objection to the limited prayer made. He submits that if the petitioner prefers fresh representation, it will be considered in accordance with law.
4. Learned counsel for respondents/ Union Of India and its authorities would submit that she is having no objection to the limited prayer. If petitioner prefers fresh representation, it will be considered in accordance with law.
5. I have heard learned counsel for parties and perused the documents placed on record.
6. Considering the submission of learned counsel for respective parties and the nature of grievance raised, the writ petition is disposed off with a direction to the petitioner that if fresh representation is preferred before the concerned authorities, the same will be decided in accordance with law within a period of 3 months from the date of filing of fresh representation.
7. With the aforesaid observation and direction, this writ petition is disposed off without making any observation on the merit of the claim of the petitioner.