Sri Kailash Bisoyi 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 differential tax amounts for works contracts executed after the GST implementation, where tenders were invited prior to 01.07.2017. These guidelines outline a procedure for determining the GST-inclusive work value for the balance work, considering the revised Schedule of Rates (SoR-2014) and the tender premium/discount. The guidelines stipulate that if the revised GST-inclusive work value for the balance work exceeds the original agreement work value for the 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 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 is to be taken against the petitioner until 31.03.2019. The petitioner is free to challenge the authority's decision if aggrieved.

Facts

The petitioner, a works contractor, filed a writ petition challenging the inaction of the opposite parties in 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 agreements. The State submitted revised guidelines issued by the Finance Department of the Government of Odisha on 10.12.2018, superseding earlier guidelines from 07.12.2017. These revised guidelines provided a procedure for determining the GST-inclusive work value for balance work executed after 01.07.2017, on contracts tendered before 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 executed partly or wholly after 01.07.2017, when the tender was invited prior to 01.07.2017. Petitioner's contention: The petitioner argued that the introduction of GST resulted in an additional tax burden not contemplated at the time of entering into the agreements, and therefore, they are entitled to reimbursement of this differential tax amount. Revenue/State's contention: The learned Addl. 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 mechanism for calculating and reimbursing the differential tax amount for balance work executed after the GST implementation.