Ashok Kumar Meher vs. State Of Odisha

Held

The Court noted that the State Government had issued revised guidelines on 10.12.2018 to address the issue of GST on works contracts for tenders invited before 01.07.2017 but executed thereafter. These guidelines outline a procedure to determine the GST-inclusive work value for the balance work. If this revised value is higher than the original agreement value for the balance work, the works contractor is to be reimbursed for the excess amount. Conversely, if the revised value is lower, 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, ventilating their grievance. The authority is to consider and dispose of this representation in light of the revised guidelines dated 10.12.2018, preferably by 31.03.2019. No coercive action was to be taken against the petitioner until 31.03.2019. The Court expressly left it open for the petitioner to challenge the decision of the authority if aggrieved.

Facts

The petitioner, a works contractor, filed a writ petition challenging the action of the opposite parties for not reimbursing the differential tax amount arising from the transition from Value Added Tax (VAT) to Goods and Services Tax (GST) on 01.07.2017. 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 in the agreement. The State submitted revised guidelines issued by the Finance Department of the Government of Odisha on 10.12.2018, superseding earlier guidelines dated 07.12.2017, which addressed the issue of GST on works contracts executed partly or wholly after the GST implementation date for tenders invited prior to 01.07.2017.

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 01.07.2017 but executed thereafter? Petitioner's Contention: The petitioner argued that the introduction of GST led to an additional tax burden that was not contemplated when the agreements were finalized, 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 10.12.2018 to address the difficulties faced by contractors regarding works contracts under GST. These guidelines provide a procedure for determining the GST-inclusive work value for the balance work executed after 01.07.2017 and stipulate reimbursement if the revised value exceeds the original agreement value.