Sri Kailash Chandra Bisoyi vs. State Of Odisha

Held

The Court noted that the State Government had issued revised guidelines on 10.12.2018 concerning works contracts under GST, superseding previous guidelines. These revised guidelines provided a procedure for determining the GST-inclusive work value for the balance work executed after 30.06.2017, for contracts where tenders were invited before 01.07.2017 based on the pre-revised Schedule of Rates (SoR-2014). The procedure involves ascertaining the work done after 30.06.2017, determining its revised estimated work value as per the Revised SoR-2014, adjusting for tender premium/discount, and then adding the applicable GST. If the revised GST-inclusive work value is higher than the original agreement value for the balance work, the contractor is to be reimbursed for the excess. 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 10.12.2018, preferably by 31.03.2019. No coercive action would be taken against the petitioner until 31.03.2019. The issue of reimbursement was not directly decided but was to be processed as per the guidelines.

Facts

The petitioner, a works contractor, filed a writ petition challenging the opposite parties' refusal to reimburse 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 contracts entered into before the GST regime, which was not originally envisaged. The State government, through the Finance Department, had issued revised guidelines on 10.12.2018, superseding earlier guidelines dated 07.12.2017, to address such issues concerning works contracts executed partly or wholly after 01.07.2017, for tenders invited prior to 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 before 01.07.2017 but executed partly or wholly after that date? (Question of law and fact, concerning the impact of GST on existing contracts). Petitioner's contention: The petitioner argued that the introduction of GST necessitated payment of tax not originally contemplated in the agreements, leading to a financial burden. They sought reimbursement of this differential tax amount. Revenue's contention: The learned Additional Government Advocate submitted that the Government had issued revised guidelines on 10.12.2018, which provided a mechanism for addressing such claims. These guidelines were annexed to an Additional Counter Affidavit.