Refund of GST Paid on Pre-GST Contract Granted

Summary in Key Points:

Issue: Should the assessee be refunded the GST paid on a contract that was awarded before the implementation of the GST regime?
Facts: The assessee was awarded a contract before the GST regime came into effect on July 1, 2017. The State Government issued a circular stating that contractors who paid GST on pre-GST contracts would be refunded upon providing proof of payment. Despite repeated requests, the assessee did not receive a refund.
Decision: The court ordered the respondent authorities to process the assessee’s GST refund claim within 90 days.

Important Note: This decision clarifies that GST should not be levied on contracts awarded under the pre-GST regime. The court upheld the State Government’s circular and directed the authorities to comply with it by processing the refund. This ruling ensures that taxpayers are not unfairly burdened by the retrospective application of GST and provides a clear directive for the timely resolution of refund claims related to pre-GST contracts.

HIGH COURT OF CHHATTISGARH

B M S Projects

State of Chhattisgarh

Bibhu Datta Guru, J.

WPC No. 156 of 2025

JANUARY 13, 2025

Harsh Wardhan and Devendra Patel, Advs. for the Petitioner. Ritesh Giri, Panel Lawyer for the Respondent.

ORDER

1. Heard.

2. The whole grievance of the petitioner is the inaction on the part of the respondents in not refunding the amount of GST collected from the petitioner in the course of the execution of the contract that was awarded to the petitioner.

3. According to the petitioner, the contract was awarded to him during the pre-GST regime and the GST law came into force from 01.07.2017. The Government of Chhattisgarh itself had issued a circular stating that all those contractors who have been made to pay the GST in contracts which were executed prior to coming into force of the GST regime i.e. from 01.07.2017 the amount of GST paid by them would be refunded by the government upon their producing certificates in respect of the payment of GST made by them.

4. The grievance of the petitioner is that inspite of repeated approach being made to the respondents, there is a total inaction on the part of the respondents so far as refund of GST is concerned. The State counsel submits that subject to verification of facts and also taking into consideration whether the claim of the petitioner falls within the circulars and orders issued by the State Government so far as refund of GST for contracts, which were awarded prior to 01.07.2017, the claim of the petitioner shall be decided at the earliest.

5. Given the said facts and circumstances of the case, the writ petition as of now stands disposed of directing the State Authorities to immediately process the claim of the petitioner so far as refund of GST is concerned, after due verification of facts and also the entitlement part of the petitioner is concerned. Let an appropriate decision be taken keeping in view the earlier order of the State Government dated 10.10.2018 in this regard and all subsequent orders also passed in this regard by the State. The State Authorities shall also keep in mind the contention of the petitioner that in many of the similar cases, the govt. itself has refunded the GST.

6. Let an appropriate decision be taken within an outer limit of 90 days from the date of receipt of the copy of this order.

7. With the aforesaid observations, the present writ petition stands disposed of.