This writ petition has been filed by M/s. Arun Construction Company, Rewa, through its Partner- Mr. Pushpendra Tiwari, seeking the following reliefs:

“7.1 This Hon’ble Court may kindly be pleased issue Writ in the nature of Certiorari setting aside the Order Impugned dated 20.12.2020.

7.2 This Hon’ble Court may be pleased to issue Writ in the nature of Mandamus, directing the Respondents to dispose of the Representation dated 28.02.2021.

7.3 This Hon’ble Court may be pleased to issue Writ in the nature of Mandamus, directing the Respondents to make the payment/reimbursement of the applicable GST on the amount of work executed and the Petitioner may further be exonerated from all the GST Liabilities, in respect of the Contract under reference.

7.4 Alternatively, this Hon’ble Court may be pleased to direct the Respondents to make policy to deal with the issue of payment of GST on the Works Contract executed prior to GST implementation i.e. 01.07.2017 and work of which were continued post 01.07.2017 wherein, GST is not paid by the Department but, was levied while procurement of the Goods and Materials, in light of the arrangements made by the Union of India, State of Bengal and State of Orrisa or as the case may be as this Hon’ble Court deem it fit and proper.

7.5 Any other and further relief/relieves, order/orders, direction/directions, which this Hon’ble Court may deem fit and proper in the circumstances of the case and thus render justice.”

The facts of the case, as averred in the memorandum of writ petition, a r e that the petitioner is a Partnership Firm and is engaged in the Civil construction activities since decades and has undertaken the contracts of various Government Departments, Semi-Government Departments, Municipal Corporation, Housing Board etc. The petitioner had entered into various contracts for construction of PMGSY Road prior to enactment of Goods and Service Tax Act, 2017 (GST), which was enforced w.e.f. 01.07.2017.

Prior to enforcement of GST, the petitioner had been paying tax levied under the VAT regime, but after enactment of GST, the petitioner has been subjected to payment of GST, which has caused additional burden on the petitioner. Consequently, the petitioner requested for GST payment on the amount of work executed after 01.07.2017 from the respondents, which request was turned down by the respondent No.6- General Manager, M.P. Rural Road Development Authority, Waidhan, District Singrauli (M.P.) vide impugned order dated 20.12.2020 on the ground that there is no provision in the agreement.

Mr. Atul Kumar Jain, learned counsel for the petitioner contended that in the period when VAT was applicable, the rate of VAT was 5% on the material purchased for execution of the work under the contracts, the Tax (Advance Commercial Tax Head) liability was of 2% only, which was in the form of TDS and would be adjusted at the time of filing return, therefore, the rates were quoted accordingly keeping in mind the applicable rates of taxes and burden of tax payment, which were also adjusted towards liabilities against tax paid during procurement and excess amount of which were refunded to the petitioner from time to time. After implementation of GST, the GST on material purchased is 5%, 18% and 28% on construction material and there is no provision of input tax credit for the works contract and, apart from this, GST on bill amount is imposed @ 12%. The Public Works Department of the State of Madhya Pradesh has duly realized the effect of GST on the works contract in view of the fact that the bid documents which are based on the Works Department Manual enforced from 1983 and the SORs implemented from time to time does not include the component of GST either in the bid documents or in the SORs and only includes the component of taxes, octroi, levy fees, toll etc. in the contract. Accordingly, the Government of Madhya Pradesh on the recommendation of the General Administration Department has passed an order dated 05.08.2017 wherein it is stated that GST is payable in all works contract separately over the amount of work executed, unlike existing contracts pre-GST enforcement. It has been further provided in the said order that on all the tenders invited in future, the proposed amount/cost shall be exclusive of GST. At the time of bill payment of the Contractor, the GST as per applicable rates shall be separately paid to the Contractor provided the Contractor shall be registered and have the GST number. Other than GST, the remaining all the taxes, octroi, levy, fees etc. shall be payable by the Contractor and the Contractor shall have to include the same in his financial offer. The Urban Administration & Development Department, Government of Madhya Pradesh has passed the order dated 14.11.2017, whereby it has been stated that all the Institutions/Organizations and Urban Bodies working under it and inviting tenders shall invite the tenders without financial loading the GST amount as per the GST rate on works contract and at the time of payment of the works contract the GST payment shall be made separately to the Contractors as per the applicable rates of the GST on the works contract and during the payment of GST separately the connected Contractor shall be compulsorily registered in GST and GSTIN.

The said order shall be applicable on all the tenders and if in the previously called tenders offer has not been received those tenders be necessarily amended and be invited after providing appropriate time.

Learned counsel for the petitioner further contended that considering the difficulties and ambiguity in respect of the payment of GST on the works contract executed prior to 01.07.2017 which continued post GST implementation, the Central Government, Ministry of Railway, even had considered the fact of over burden on the contractor and diligently passed order to make appropriate arrangements to bridge the gap between the existing tax liabilities and new GST liabilities, making it a partnering efforts to accomadate their contractors and in the interest of the work, thereby the burden of GST liability towards heavy rate tax shall not be burdened on the contractor alone and introduced concept of neutralization in their circular dated 27.10.2017. Similarly, the State of Bengal and Orrisa have also issued notifications dated 16.08.2017 and 07.12.2017 respectively and introduced different mechanism to deal with such works contracts, which are though executed pre-GST regime but were continued thereafter to accommodate the contractors, saving them from over burdened taxes and double jeopardies.

Learned counsel for the petitioner submitted that petitioner in this respect has submitted a detailed representation dated 28.02.2021 to the respondents, namely, (i) Chief Secretary, State of M.P., Mantralaya, Vallabh Bhawan, Bhopal; (ii) Principal Secretary, General Administrative Department, State of M.P., Bhopal (iii) Principal Secretary, Commercial Tax Department, State of M.P., Bhopal; (iv) Commissioner, M.P. State Goods and Service Tax Department, Office of Commissioner, Indore and (v) Chief Executive Officer, M.P. Rural Road Development, Authority, Bhopal. Lastly, it is contended that in an identical matter being WP-1310-2021 (Builders Association of India, Indore vs. the State of M.P. & others) this Court has passed final order dated 29.01.2021 and the present petitioner intends to again file a comprehensive representation before the respondent No.1 alongwith copy of said order dated 29.01.2021, which may be directed to be considered for redressal of his grievance.

Having regard to the submissions made and the arguments advanced, we deem it proper to direct the respondent No.1- Principal Secretary, Public Works Department, Government of M.P., Bhopal to decide the said representation which will be filed by the petitioner by a speaking order after providing opportunity of hearing to the representative of the petitioner within a period of three months from the date copy of this order is produced before him.

With the aforesaid direction, the present writ petition stands disposed of.