High Court directs contractor’s GST reimbursement claim to be decided by Committee, holding that pending representations must be considered under contract terms and law

Case Details

• Case Title: M/s Kunal BSBK Joint Venture Pvt. Ltd. v. Chhattisgarh Housing Board & Ors.

• Court: High Court of Chhattisgarh, Bilaspur

• Petition No.: WPC No. 65 of 2024

• Judgment Date: 19.01.2024

• Category of Dispute: Reimbursement of GST on Works Contract

• Relevant Sections: Section 7, Section 9 of CGST Act, 2017 (scope of supply and levy of tax), tender clause 2.14 (exclusion of service tax on EWS/LIG housing), GST regime applicability from 01.07.2017.

Facts (Paras 1–3)

The petitioner, a works contractor, was awarded a contract on 09.02.2016 by Chhattisgarh Housing Board for construction of EWS and LIG houses. The GST Act came into force on 01.07.2017, after the contract was already awarded. The petitioner raised running bills and paid GST amounting to ₹8.53 crores (up to RA 57). The grievance was that despite contractual stipulations excluding service tax for EWS/LIG houses, the Housing Board did not reimburse the GST, even after repeated representations dated 04.07.2023 and 13.10.2023. The petitioner sought a writ of mandamus directing reimbursement with 14.25% interest.

Dispute (Paras 3–4)

The core dispute centered on whether GST liability post 01.07.2017 on ongoing contracts for EWS/LIG housing was reimbursable by the Chhattisgarh Housing Board.

• Petitioner’s stand: Since the contract predated GST and expressly excluded service tax for EWS/LIG, reimbursement of GST already deposited must be made.

• Respondent’s stand: Clause 2.14 of the tender stated that claims for tax structure changes would not be entertained, but if service tax became applicable, reimbursement would be made. GST, being distinct from service tax, was argued not to fall under this clause.

Observations (Paras 5–6)

The Court noted that a Committee had already been constituted by the Chhattisgarh Housing Board to deal with disputes regarding GST reimbursement/refund. Considering that the matter involved factual and contractual interpretation, the Court held it appropriate for the petitioner’s grievance to be examined by this Committee. The petitioner was permitted to submit a fresh representation with all supporting documents, which the Committee was directed to consider strictly in accordance with law and the contractual terms.

Judgment (Paras 6–7)

The High Court did not itself adjudicate the claim of reimbursement but disposed of the writ with the following directions:

1. The petitioner may submit a fresh representation before the Housing Board’s Committee with relevant documents.

2. The Committee shall consider and decide the representation within 60 days from receipt of the order.

3. The decision must align with applicable law and agreed contractual terms.

Table of Earlier Cases Referred

No external precedents were cited in this judgment.

Between Fine Lines

For contractors executing pre-GST works contracts, disputes on GST reimbursement must be pursued through the authority or committee constituted under the contracting department. Courts are reluctant to adjudicate directly when contractual clauses are ambiguous, preferring instead to direct structured resolution mechanisms. For industry, this means timely submission of representations with proper documentation before such committees is crucial for reimbursement claims.

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