Tusharkanta Samantaray vs. State Of Odisha And Others

Held

The Court noted that the revenue/State had issued revised guidelines on December 10, 2018, to address the grievances of contractors regarding the differential tax amount arising from the GST implementation. These guidelines provide a detailed procedure for calculating the GST-inclusive work value for the balance work executed after June 30, 2017, for contracts tendered before July 1, 2017. The guidelines stipulate that if the revised GST-inclusive work value for the balance work is more than the original agreement work value for that 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 recovered. The Court directed the petitioner to make a comprehensive representation before the appropriate authority within four weeks, ventilating their grievance. The authority is to consider and dispose of this representation in light of the revised guidelines dated December 10, 2018, as expeditiously as possible, preferably by March 31, 2019. The Court also stated that if the petitioner is aggrieved by the authority's decision, they can challenge it. No coercive action is to be taken against the petitioner until March 31, 2019. The issue of whether the petitioner is entitled to reimbursement is to be decided by the authority based on the revised guidelines.

Facts

The petitioner, a works contractor, filed a writ petition challenging the action of the opposite parties (revenue/State) for 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 originally envisaged. The revenue/State submitted revised guidelines issued by the Government of Odisha, Finance Department, on December 10, 2018, superseding earlier guidelines from December 7, 2017. These revised guidelines addressed the issue of additional amounts claimed by contractors for GST on works tendered before July 1, 2017, but executed partly or wholly after that date.

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 thereafter? (Question of law) Petitioner's contention: The petitioner argued that the introduction of GST resulted in an additional tax burden that was not contemplated when the agreements were made, and therefore, they should be reimbursed for this differential tax amount. Revenue/State's contention: The revenue/State submitted revised guidelines dated December 10, 2018, which provided a procedure for determining and reimbursing the GST-inclusive work value for the balance work executed after GST implementation. They relied on the Office Memorandum No. FIN-CTI-TAX-0045-2017/38535/F dated 10.12.2018.