Chandra Sekhar Jena vs. State Of Odisha

Held

The Court did not decide the core issue of entitlement to reimbursement directly but disposed of the writ petition by directing the Petitioner to make a comprehensive representation to the appropriate authority within four weeks. The Court mandated that the authority must consider and dispose of this representation in light of the revised guidelines issued by the Finance Department, Government of Odisha, on December 10, 2018. The authority is to act expeditiously, preferably within three months from the receipt of the certified copy of the order. The Petitioner retains the right to challenge the authority's decision if aggrieved. No coercive action is to be taken against the Petitioner until a decision is reached by the authority. The Court noted that the matter was identical to a previous writ petition, W.P.(C) No.5933 of 2020, and was disposed of in terms of the order passed in that case.

Facts

The Petitioner, Chandra Sekhar Jena, challenged the action of the Opposite Parties (State of Odisha and Ors.) for not reimbursing the differential tax amount arising from the transition from Value Added Tax (VAT) to Goods and Services Tax (GST) effective July 1, 2017. The Petitioner's grievance stemmed from the requirement to pay GST on works contracts, which was not anticipated when agreements were entered into under the previous tax regime. The State had issued revised guidelines on December 10, 2018, superseding earlier guidelines from December 7, 2017, to address difficulties faced by contractors regarding works contracts under GST.

Key Issues

1. Whether the Petitioner is entitled to reimbursement of differential tax amounts due to the change in tax regime from VAT to GST for works contracts executed partly or wholly after July 1, 2017, when tenders were invited prior to this date. The Petitioner argued that the introduction of GST imposed a tax liability not envisaged at the time of entering into agreements, leading to a financial burden. The State, through its revised guidelines dated December 10, 2018, provided a mechanism for determining the additional amount payable to works contractors. These guidelines addressed how to calculate the GST-inclusive work value for the balance work executed after July 1, 2017, based on revised Schedule of Rates (SoR-2014) and tender premium/discount, and stipulated reimbursement if the revised value exceeded the original agreement value.