Chandra Sekhar Jena vs. State Of Odisha

Held

The Court noted that the Petitioner's case was identical to other writ petitions concerning the issue of differential tax amounts for works contracts due to the GST regime change. The Court referred to the revised guidelines issued by the Government of Odisha, Finance Department, on December 10, 2018. These guidelines provided a mechanism for calculating the GST-inclusive work value for the balance work executed after July 1, 2017, based on tenders invited before that date. The guidelines stipulated that if the revised GST-inclusive work value for the balance work was more than the original agreement work value for the balance work, the works contractor was to 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 then to consider and dispose of this representation in light of the revised guidelines dated December 10, 2018, as expeditiously as possible, preferably within three months from the receipt of the certified copy of the order. The Petitioner was granted liberty to challenge the authority's decision if aggrieved. No coercive action was to be taken against the Petitioner until a decision was reached.

Facts

The Petitioner, Chandra Sekhar Jena, filed a writ petition challenging the Opposite Parties' (State of Odisha and others) action of 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 fact that the introduction of GST required them to pay taxes not originally envisaged when entering into agreements, particularly concerning works contracts. The State had issued revised guidelines on December 10, 2018, superseding earlier ones from December 7, 2017, to address such issues faced by contractors.

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 entered into prior to July 1, 2017, but executed partly or wholly thereafter? The Petitioner argued that the introduction of GST imposed an additional tax burden not contemplated at the time of entering into agreements, leading to a financial disadvantage. They sought reimbursement of this differential tax amount. The Opposite Parties, through the Finance Department of the Government of Odisha, issued revised guidelines on December 10, 2018, to address the grievances of contractors regarding works contracts under GST. These guidelines provided a procedure for determining the revised GST-inclusive work value for the balance work and stipulated reimbursement if this revised value exceeded the original agreement value.