H.L. Infrastructure vs. State Of Odisha

Held

The Court acknowledged the petitioner's grievance regarding the differential tax amount due to the GST regime change. The Court noted that the State Government had issued revised guidelines on 10.12.2018, which provided a comprehensive procedure for determining the GST-inclusive work value for the balance work in cases where tenders were invited before 01.07.2017 but payments were made after the GST implementation. These guidelines stipulated that if the revised GST-inclusive work value for the balance work exceeded the original agreement work value, the contractor would be reimbursed for the excess amount. The Court directed the petitioner to make a comprehensive representation before the appropriate authority within four weeks, ventilating their grievance. The authority was directed to consider and dispose of the representation in light of the revised guidelines dated 10.12.2018, as expeditiously as possible, preferably by 31.03.2019. The Court also ordered that no coercive action would be taken against the petitioner until 31.03.2019. The writ petition was disposed of with liberty to the petitioner to challenge the authority's decision if aggrieved.

Facts

The petitioner, a works contractor, filed a writ petition challenging the opposite parties' action of 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 initially envisaged. The State government, through the Finance Department, 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 but tendered before that date. The revised guidelines provided a procedure for determining the GST-inclusive work value for the balance work and reimbursement of excess amounts.

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? (Question of law) 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 should be reimbursed for this differential tax amount. Revenue/State's contention: The learned Additional Government Advocate submitted that the Government had issued revised guidelines on 10.12.2018, which provided a mechanism to address the grievances of contractors regarding works contracts executed post-GST implementation for tenders issued pre-GST. The State relied on the Office Memorandum No. FIN-CTI-TAX-0045-2017/38535/F dated 10.12.2018.