2026-VIL-387-RAJ
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SGST High Court Cases

GST – Discrimination in not extending GST rate revision benefit to the petitioner – Challenge to rejection of petitioner’s representation for refund of differential GST amount by the respondent Rajasthan State Road Development and Construction Corporation Ltd. (RSRDCC) - The government had extended the benefit of refund of differential GST amount to contractors working under other government agencies like the Public Works Department and Rajasthan Housing Board, but the RSRDCC denied the same benefit to the petitioner - Whether the denial of the GST rate revision benefit to the petitioner by the RSRDCC, while extending it to other similarly situated contractors, is discriminatory and violative of Article 14 of the Constitution – HELD - The denial of the GST rate revision benefit to the petitioner by the RSRDCC, when the same benefit is being extended to other contractors working under government agencies, is discriminatory and violative of Article 14. The RSRDCC, being a government undertaking, is bound by the orders and rules issued by the Governor of Rajasthan, including the order dated 07.01.2021 which provides for an equitable adjustment of the contract price due to change in GST rates - The order dated 07.01.2021 clearly says that if any rates of Tax are increased or decreased in case of performance of a contract, an equitable adjustment of the Contract price shall be made to fully take into account any such change by addition to the Contract Price or deduction there from, as the case may be. The variation in the GST rates came in existence during the course of performance of the contract by the petitioner which was assigned by the respondent-Company. The language of the order dated 07.01.2021 clearly speaks that if there is any variation in the GST rates, the effect arising from the variation would be applicable to the contractors whose work at the relevant time was in progress and not completed - The differential treatment meted out to the petitioner, without any reasonable basis, is arbitrary and cannot be sustained. The respondents are directed to make refund of the differential amount of the GST i.e. 6% to the petitioner, which shall be effective from the revision of the GST Rate - the writ petition is allowed - Maintainability of writ petition against State instrumentality Fact - Petition challenging the rejection of representation for refund of differential GST amount by the respondent Rajasthan State Road Development and Construction Corporation Ltd. (RSRDCC), which is a government undertaking - Whether the writ petition is maintainable against the RSRDCC, which is a contractual dispute, or the petitioner should have approached the dispute redressal mechanism provided under the contract – HELD - Even in contractual matters, when the State or its instrumentality fails to exercise fairness or indulges in arbitrary or discriminatory actions, the aggrieved party can invoke the writ jurisdiction under Article 226 of the Constitution. The RSRDCC being a government undertaking, its actions are subject to the constitutional guarantee of non-arbitrariness under Article 14. The mere availability of an alternative remedy does not oust the jurisdiction of the High Court, as the rule regarding alternative remedy is one of policy, convenience and discretion rather than a rule of law - Applicability of PWF&AR and order on GST rate revision to RSRDCC - The contract agreement between the petitioner and RSRDCC contained clauses referring to PWF&AR and circulars issued by the Government of Rajasthan. The government had also issued an order dated 07.01.2021 amending the PWF&AR to insert a new clause 36E dealing with the impact of change in GST rate - Whether the order dated 07.01.2021 and the PWF&AR are applicable to the RSRDCC, which is a government undertaking - HELD - The RSRDCC being a government undertaking, the orders and rules framed by the Governor of Rajasthan, including the PWF&AR, are binding on it. The contract agreement itself referred to the applicability of PWF&AR and government circulars. Further, the RSRDCC does not have any separate rules or regulations for its contracts, and it follows the same framework as applicable to other government contracts. Therefore, the order dated 07.01.2021 amending the PWF&AR to insert clause 36E dealing with change in GST rates is also applicable to the RSRDCC.
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