Tusharkant Samantaray vs. State Of Odisha

Held

The Court noted that the Government of Odisha had issued revised guidelines on December 10, 2018, to address the issue of differential tax amounts for works contracts executed partly or wholly after the implementation of GST. These guidelines provide a detailed procedure for determining the GST-inclusive work value for the balance work, considering the original agreement rates based on the pre-revised Schedule of Rates (SoR-2014) and the revised SoR-2014. The guidelines stipulate that if the revised GST-inclusive work value for the balance work is more than the original agreement work value for the balance work, the works contractor is to be reimbursed for the excess amount. Conversely, if it is less, the payment is to be reduced, and any excess payment already made is to be recovered. The Court directed the petitioner to make a comprehensive representation before the appropriate authority within four weeks, which the authority would consider and dispose of in light of the revised guidelines dated December 10, 2018, preferably by March 31, 2019. No coercive action was to be taken against the petitioner until March 31, 2019.

Facts

The petitioner, a works contractor, filed a writ petition challenging the action of the opposite parties in not reimbursing the differential tax amount arising from the transition from Value Added Tax (VAT) to Goods and Services Tax (GST) effective July 1, 2017. The petitioner's grievance was that they were required to pay GST on works contracts entered into before the GST regime, which was not anticipated in the original agreements. The State submitted revised guidelines issued by the Finance Department of the Government of Odisha on December 10, 2018, superseding earlier guidelines dated December 7, 2017, to address such issues.

Key Issues

1. Whether the petitioner is entitled to reimbursement of the differential tax amount arising from the change in tax regime from VAT to GST for works contracts entered into prior to July 1, 2017, but executed partly or wholly after that date? Petitioner's contention: The petitioner argued that the introduction of GST resulted in an additional tax burden that was not envisaged at the time of entering into the agreements, and therefore, they should be reimbursed for this differential tax amount. Revenue's contention: The learned Additional Government Advocate submitted that the Government had issued revised guidelines on December 10, 2018, to address the difficulties faced by contractors regarding works contracts under GST. These guidelines provide a procedure for determining and reimbursing additional amounts towards GST.