H.L. Infrastructure vs. State Of Odisha

Held

The Court did not directly decide the entitlement to reimbursement but disposed of the writ petition by directing the petitioner to make a comprehensive representation before the appropriate authority within four weeks. The authority is to consider and dispose of this representation in light of the revised guidelines dated 10.12.2018 issued by the Finance Department, Government of Odisha. The disposal is to be done expeditiously, preferably by 31.03.2019. The Court also stated that if the petitioner is aggrieved by the authority's decision, they are free to challenge it. No coercive action is to be taken against the petitioner until 31.03.2019. The Court expressly left undecided the ultimate outcome of the representation, focusing on the procedural path forward.

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The State submitted revised guidelines issued by the Government of Odisha, Finance Department, dated 10.12.2018, which superseded earlier guidelines from 07.12.2017.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 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 prior to 01.07.2017 but executed partly or wholly after that date, under Section 14 of the Odisha Value Added Tax Act, 2004 and relevant provisions of the GST regime. Petitioner's contention: The petitioner argued that the introduction of GST resulted in an additional tax burden not accounted for in the original agreements, and they should be compensated 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 such issues concerning works contracts under GST, superseding previous guidelines. These guidelines provided a mechanism for calculating and reimbursing the differential tax amount.