Contractual tax reimbursement under government works contracts cannot be denied where payment evidence is undisputed.

Contractual tax reimbursement under government works contracts cannot be denied where payment evidence is undisputed.
Case-Laws
GST
Clause 42.1 requires the department to reimburse Central and State sales and other taxes paid by a works contractor upon proof of payment. Undisputed GSTR-3B forms establish payment of CGST and SGST for this purpose. Denial of reimbursement despite such proof is arbitrary, illegal and inconsistent with Article 14, since governmental authorities must act fairly and without arbitrariness in contractual dealings. Reimbursement of the documented CGST and SGST payments is required, with interest at 12% per annum from the respective tax-payment dates.
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