M/S.Biraja Construction vs. Odisha State Rural Road Agency Cum Rural Development Dept.

Held

The Court acknowledged the revised guidelines issued by the Finance Department of the Government of Odisha on 10.12.2018, which provided a mechanism for addressing the petitioner's grievance. The Court directed the petitioner to make a comprehensive representation before the appropriate authority within four weeks, ventilating their grievance. The authority was instructed to consider and dispose of this representation in light of the revised guidelines dated 10.12.2018 as expeditiously as possible, preferably by 31.03.2019. The Court also stated that if the petitioner remained aggrieved by the authority's decision, they would be at liberty to challenge it. No coercive action was to be taken against the petitioner until 31.03.2019. The writ petition was disposed of with these directions.

Facts

The petitioner, a works contractor, filed a writ petition challenging the opposite parties' failure 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 the GST liability was not anticipated when entering into agreements for works contracts. The State submitted revised guidelines issued by the Finance Department of the Government of Odisha on 10.12.2018, which superseded earlier guidelines dated 07.12.2017. These revised guidelines provided a procedure for determining the GST-inclusive work value for balance work executed after 01.07.2017, where tenders were invited before that date based on the pre-revised Schedule of Rates – 2014 (SoR-2014).

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 partly or wholly thereafter? The petitioner argued that the introduction of GST resulted in an additional tax burden not envisaged at the time of contract execution, necessitating reimbursement. The State contended that revised guidelines were issued on 10.12.2018 to address such grievances. These guidelines outlined a procedure for calculating the GST-inclusive work value for balance work, considering the revised SoR-2014 and tender premium/discount, and provided for reimbursement if the revised value exceeded the original agreement value for the balance work. The State relied on its Office Memorandum No. FIN-CTI-TAX-0045-2017/38535/F dated 10.12.2018.