THE HIGH COURT OF MADHYA PRADESH
Writ Petition No.28124/2018 (M/s Tomar Builders and
Contractors Pvt. Ltd. Vs. State of M.P. and others)
and
Writ Petition No.28128/2018 (M/s KNR Construction
Limited Vs. State of M.P. and others)
1
Gwalior
12.12.2018
Shri M.L. Swarnkar, learned counsel for the
petitioner in both petitions.
Writ Petition No.28124/2018
Heard on admission
Petitioner A Class Contractor in seisin with works
contracts under various agreements, viz.
(i) Agreement No.07/CE/NH/2016-17 dated 5th
December, 2016 (Sagar-Chhatarpur Road-
Length 58.4 km)- (NH Zone, Bhopal)
(ii) Agreement No.08/CE/NH/2016-17 dated 27th
March, 2017 (Sagar-Bina Road -Length km 1
to 39/4) -(NH Zone, Bhopal)
(iii) Agreement No.02/MDR/CRF/2016-17 dated
03.6.2016 (Shivpuri Lup -Shitla Mata- Chinor
-Dabra Road- Length 53.20 km)- (NORTH
Zone, Gwalior)
(iv) Agreement No.03/MDR/CRF/2016-17 dated
THE HIGH COURT OF MADHYA PRADESH
Writ Petition No.28124/2018 (M/s Tomar Builders and
Contractors Pvt. Ltd. Vs. State of M.P. and others)
and
Writ Petition No.28128/2018 (M/s KNR Construction
Limited Vs. State of M.P. and others)
2
03.06.2016 (Indergarh Pichor Road - Length
9.25 Km) - (NORTH Zone, Gwalior)
with Madhya Pradesh Public Works Department has filed
this writ petition seeking direction:
(i) That, the liability of GST which has
been imposed upon the PETITIONER after
inception of GST Act, 2017 may kindly be
ordered to be paid/adjusted to the
PETITIONER.
(ii) That, the RESPONDENTS may be
directed to consider and pass orders on
PETITIONER's representation regarding the
payment of 18% or 12% GST on the value
of work done for subjected works contract
as the agreement were executed prior to
01.07.2017 and the works are still under
progress.
The reliefs sought by the petitioner emanates
from the notices issued by Directorate General of GST
THE HIGH COURT OF MADHYA PRADESH
Writ Petition No.28124/2018 (M/s Tomar Builders and
Contractors Pvt. Ltd. Vs. State of M.P. and others)
and
Writ Petition No.28128/2018 (M/s KNR Construction
Limited Vs. State of M.P. and others)
3
Intelligence Bhopal Zonal Unit on 8.8.2018 and
3.9.2018 (Annexure P/1 and P/2) in respect of non-
filing of GSTR 3B return under section 46 of Central
Goods and Services Act, 2017 which mandates that
where a registered person fails to furnish a return under
Section 39 or Section 44 or Section 45, a notice shall be
issued requiring him to furnish such return within fifteen
days in such form and manner as may be prescribed.
Vide these notices action under Section 62 read with
section 29 is contemplated.
Contentions of the petitioner is that because of
in-action/in-decision of the respondents Public Works
Department the petitioner is subjected to said notices. It
is urged that the agreements were executed prior to
the commencement of GST which came in existence
with effect from 1.7.2017. It is contended that the
THE HIGH COURT OF MADHYA PRADESH
Writ Petition No.28124/2018 (M/s Tomar Builders and
Contractors Pvt. Ltd. Vs. State of M.P. and others)
and
Writ Petition No.28128/2018 (M/s KNR Construction
Limited Vs. State of M.P. and others)
4
petitioner is unable to file the GST return because
before GST regime the petitioner was liable to pay 2%
of the Commercial Tax on Works Contract (Civil) which
is now increased to 18% or 12% which is to be
compensated by the department. It is urged that though
Central Government Organization like Railways, CPWD
etc. have notifications in that regard; however, the
Public Works Department has not taken any remedial
measures provided in Clause 19.17 which stipulates
that:
“19.17 Change in law
19.17.1 If as a result of Change in Law, the
Contractor suffers any additional costs in the
execution of the Works or in relation to the
performance of its other obligations under
this Agreement, the Contractor shall, within
15 (fifteen) days from the date it becomes
THE HIGH COURT OF MADHYA PRADESH
Writ Petition No.28124/2018 (M/s Tomar Builders and
Contractors Pvt. Ltd. Vs. State of M.P. and others)
and
Writ Petition No.28128/2018 (M/s KNR Construction
Limited Vs. State of M.P. and others)
5
reasonably aware of such addition in cost,
notify the Authority with acopy to the
Authority's Engineer of such additional cost
due Change in Law.
19.17.2 If as a result of Change in Law,
the Contractor benefits from any reduction in
costs for the execution of this Agreement or
in accordance with the provisions of this
Agreement, either Party shall, within 15
(fifteen) days from the date it becomes
reasonably aware of such reduction in cost,
notify the other Party with a copy to the
Authority's Engineer of such reduction in cost
due to Change in Law.
19.17.3 The Authority's Engineer shall,
within 15 (fifteen)days from the date of
receipt of the notice from the Contractor or
the Authority, determine any addition or
reduction to the Contract Price, as the case
may be, due to the Change in Law.”
THE HIGH COURT OF MADHYA PRADESH
Writ Petition No.28124/2018 (M/s Tomar Builders and
Contractors Pvt. Ltd. Vs. State of M.P. and others)
and
Writ Petition No.28128/2018 (M/s KNR Construction
Limited Vs. State of M.P. and others)
6
It is urged that though the petitioner is paying
GST upon the construction materials during the currency
of Works Contract and thereby earning input tax credit
(ITC) but is unable to adjust the ITC with the liability as
they are not getting GST from the department.
In these factual background the petitioner seeks
the directions, quoted supra.
Careful reading of the grievance raised by the
petitioner reveals that the same emanates from the
agreement entered into between the petitioner and the
Public Works Department. It is not disputed by learned
counsel for the petitioner that there exists dispute
resolution mechanism in the agreements.
In view whereof instead of dwelling on the matter
as to whether the department should or should not
THE HIGH COURT OF MADHYA PRADESH
Writ Petition No.28124/2018 (M/s Tomar Builders and
Contractors Pvt. Ltd. Vs. State of M.P. and others)
and
Writ Petition No.28128/2018 (M/s KNR Construction
Limited Vs. State of M.P. and others)
7
enter into supplementary agreement or to make
existing works contract as GST neutral, the petitioner
is relegated to seek redressal as per mechanism
provided in the agreement. In case if such a dispute is
raised, it is expected of the authorities concerned to
address the issue objectively and expeditiously,
preferably within three months from the date of
communication of the order.
W.P.No.28128/2018.
The petitioner in seisin with the works contract of
Widening and Reconstruction of Madhya Pradesh District
Connectivity Sector Project (MPDCSP) vide agreement
No.146/2015 dated 6.8.2015 has raised the similar
grievance as the petitioner in W.P.No.28124/2018. The
present writ petition is also disposed of in same terms
as Writ Petition No.28124/2018.
THE HIGH COURT OF MADHYA PRADESH
Writ Petition No.28124/2018 (M/s Tomar Builders and
Contractors Pvt. Ltd. Vs. State of M.P. and others)
and
Writ Petition No.28128/2018 (M/s KNR Construction
Limited Vs. State of M.P. and others)
8
The petitions are finally disposed of in above
terms. No costs.
(Sanjay Yadav) (Vivek Agarwal)
Judge Judge
Pawar/-
ASHISH PAWAR
2018.12.22
15:22:51 +05'30'
