M/S.C.P.Mohanty And Associates vs. State Of Odisha

Held

The Court acknowledged the revised guidelines issued by the Finance Department of the Government of Odisha on December 10, 2018, which provide a framework for addressing the claims of works contractors for additional GST amounts on contracts predating the GST regime but executed thereafter. The Court directed the petitioner to make a comprehensive representation before the appropriate authority within four weeks, detailing their grievances. The authority is mandated to consider and dispose of this representation expeditiously, preferably by March 31, 2019, in light of the aforementioned revised guidelines. The Court also stipulated that if the petitioner is aggrieved by the authority's decision, they are at liberty to challenge it. Furthermore, no coercive action is to be taken against the petitioner until March 31, 2019. The writ petition was disposed of with these directions.

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 initially envisaged. The 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 claims for additional amounts towards GST for 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. Petitioner's contention: The petitioner argued that the introduction of GST resulted in an increased tax burden that was not contemplated when the agreements were finalized, thus entitling them to reimbursement of the differential tax amount. Revenue's contention: The learned Additional Government Advocate submitted that the Government had issued revised guidelines on December 10, 2018, which provided a procedure for determining and reimbursing the differential tax amount for such works contracts. The State relied on the Office Memorandum No. FIN-CTI-TAX-0045-2017/38535/F dated 10.12.2018.