This writ petition has been filed by Builders Association of India, through its Chairman, Indore Centre (Indore) praying for a direction to the respondents to consider and decide its representation dated 02.01.2021 (Annexure-P/6) within a period of two months.

The facts of the case, as averred in the memorandum of writ petition, are that the petitioner is an association of builders and contractors, registered and constituted under the provisions of the Societies Registration Act, 1860.

The members of petitioner-Association have been working and executing work of various departments and local bodies of the State of Madhya Pradesh such as Water Resource Department, Public Works Department, M.P. Housing Board, Municipal Corporation, Panchayat Development Authorities, MPAKVN, Bridge Corporation etc. The members of petitioner- Association have entered into the contract of infrastructure development 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 members of petitioner-Association have been paying tax levied under the VAT regime of 2002. The service tax for construction work was mentioned in the negative list, on account of which, the members of petitioner-Association were paying VAT only. After enactment of GST, the members of petitioner-Association have been subjected to payment of GST.

Mr. Shekhar Sharma, learned counsel for the petitioner contended that the differential amount of GST as against VAT is around 8 to 10 percent more. On account of extra burden of tax in the form of GST regime, the entire business activities of the trade have been paralyzed and some of the members of petitioner-Association were compelled to stop the work. After substantial progress of work, when bills were submitted by the members of petitioner-Association before the respondent- Department, the payments were made without deducting taxes as quoted at the time of tender. It is further contended that prior to 01.07.2017, the TDS has been deducted as provided in the earlier tax regime but thereafter no deduction is levied by the authorities from running bills. In absence of any clear direction, the respondents are not deducting TDS whereas all the agreements were executed prior to 01.07.2017.

Therefore in the notification of GST, which has become applicable from 01.07.2017, it is not mentioned that it would also apply to pending contracts.

Learned counsel for the petitioner submitted that considering the extra burden of GST, the M.P. Urban Development Corporation Limited, which is working under the Ministry of Urban Development and Housing Development, Government of M.P., vide order dated 19.08.2020 passed in its 6th Board Meeting specifically delegated the power to make payment of additional liability arising out of implementation of GST in the work’s contracts of ADB and World Bank Aided Projects bid before 1st July, 2017.

A copy of said order dated 19.08.2020 is placed on record as Annexure-P/4.

Similarly, the M.P. Road Development Corporation Limited has issued order dated 18.12.2020 (Annexure-P/5) laying down the Standard Operating Procedure (SOP) to address GST payment claims. The said SOP will be adopted for calculation of net impact of GST for item rate contracts under ABD/NDB scheme and EPC contracts/projects, implemented through MPRDC. Learned counsel further contended that the contractors who are executing the work of MP Urban Development Corporation Limited and MP Road Development Corporation Limited are similarly placed in all respect with the contractors of other departments. The aforesaid Corporations being owned and controlled by the State Government, the contractors executing work contracts of the other departments of the State Government cannot be discriminated in any way and are entitled to similar treatment. Learned counsel submitted that petitioner-Association in this respect has submitted a detailed representation dated 02.01.2021 to the respondents, namely, (i) Chief Secretary, Government of M.P., Mantralaya, Vallabh Bhawan, Bhopal; (ii) Secretary, Ministry of Finance, Government of India, Department of Revenue, New Delhi; (iii) Principal Secretary, Department of Revenue, Bhopal; (iv) Principal Secretary, Public Works Department, Bhopal and (v) Principal Secretary, Department of Urban Administration & Development, Mantralaya, Bhopal.

Having regard to the submissions made and the arguments advanced and considering that the petitioner-Association has already approached the respondents by making a comprehensive representation alongwith certain documents, we deem it proper to direct the Chief Secretary, Government of Madhya Pradesh, Bhopal to decide the representation filed by the petitioner- Association by a speaking order after providing opportunity of hearing to the representative of the petitioner-Association 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.