The Court held that the High Court was not justified in dismissing the writ petition on the ground of an arbitration agreement, as the reimbursement dispute under the tax clause fell outside it.
The Supreme Court has set aside a Chhattisgarh High Court judgment that had dismissed a contractor’s writ petition seeking reimbursement of GST paid on a pre-GST works contract, holding that the dispute did not fall within the arbitration clause of the contract [Kunal BSBK Joint Venture Ltd. v. Chhattisgarh Housing Board].
A bench of Justices P.S. Narasimha and Alok Aradhe was examining Clause 2.14.A of a 2016 contract, which carried a note that service tax would not apply to the tender and, “if applicable then same will be reimbursed by the C.G.H.B.” The High Court had treated the claim as a private money dispute involving disputed facts, to be resolved through the arbitration mechanism under Clause 1.21 or a civil suit, and had also dismissed the review petition.
The Supreme Court held that the refund dispute based on Clause 2.14.A would not fall within the purview of the arbitration clause, and that the High Court was not justified in dismissing the writ petition on that ground.
Without expressing any view on how Clause 2.14.A should be interpreted, the Court restored the writ petition and the review petition to the High Court’s file, permitting both sides to raise all questions of law and fact on merits.
2026-juristway.com-3095-SC-GST
