Case Title: M/s Apex Structure Pvt. Ltd. vs. State of Madhya Pradesh & Others
Court: High Court of Madhya Pradesh, Indore Bench
Petition Number: Writ Petition No. 39378 of 2024
Judgment Date: 12 December 2024
Category: Rate of GST – Contractual Works for Government Entities
Relevant Sections: Article 226 of the Constitution of India; Section 9 of CGST Act, 2017; Notifications No. 24/2017-CT(R) dated 21.09.2017 and 15/2021-CT(R) dated 18.11.2021
Facts (Para 2–5)
M/s Apex Structure Pvt. Ltd., a construction company, was awarded contracts by a State Government enterprise (Respondent No. 2) for works such as the renovation and construction of the Government New Law College, Indore, under Agreement No. 10/2021-22. Initially, GST at the rate of 12% applied under Notification No. 24/2017-CT(R). Subsequently, Notification No. 15/2021-CT(R) increased the rate to 18% effective from 01.01.2022.
Despite this statutory increase, the State entity continued to pay invoices with 12% GST, leaving the contractor to bear the differential 6%. The petitioner represented to the department for reimbursement of the additional GST paid from January to September 2022. Though the Public Enterprise accepted the liability in its letter dated 26.09.2022, payment was withheld pending State Government approval, prompting the present writ petition under Article 226.
Questions Before the Court (Para 6–7)
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Whether the petitioner could invoke writ jurisdiction despite the availability of an arbitration clause in the contract.
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Whether the State entity (a Government Entity) was obligated to pay the enhanced GST rate of 18% applicable from 01.01.2022.
Observations (Para 7–9)
The Court observed that the dispute did not involve contested facts but rather a clear statutory obligation arising from the GST rate change notified by the Central Government. Hence, the existence of an arbitration clause could not oust writ jurisdiction when the matter involved a pure question of law.
Further, the Court noted that both the GST Department (Respondent No. 4) and the contractor agreed that the rate of tax was statutorily increased from 12% to 18% and that the burden must be borne by the contract-awarding government entity.
Judgment (Para 9–10)
The Hon’ble Bench directed Respondent No. 2 to pay the differential GST amount (6%) for the period from 01.01.2022 to 30.09.2022 within three months from the date of receipt of the certified order. If payment was delayed, the petitioner would be entitled to interest at 6% per annum from the date of entitlement.
The writ petition was accordingly disposed of.
Summary of Cases Referred
| Case / Citation | Issue | Verdict / Relevance |
|---|---|---|
| No specific external case referred | — | The Court relied on statutory notifications and the uncontested facts to decide the matter. |
Between Fine Lines
For contractors executing works for government entities, this judgment underscores that any statutory GST rate revision automatically binds the contract-awarding entity to reimburse the contractor for the enhanced liability, even if the contract does not expressly provide for it. Delay in State-level administrative approval cannot justify withholding reimbursement when liability arises under law.
Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”
