M/S. Biraja Construction vs. Odisha Construction Corporation LTD. (Occl) Khurda

Held

The Court noted that the issue of differential tax amounts for works contracts due to the GST transition had been a subject of multiple writ petitions. The State had issued revised guidelines on December 10, 2018, to address these concerns. The Court directed the petitioner to make a comprehensive representation before the appropriate authority within four weeks, ventilating their grievance. The authority was instructed 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. The Court also stated that if the petitioner remained aggrieved by the authority's decision, they would be at liberty to challenge it. No coercive action was to be taken against the petitioner for a period of three months.

Facts

The petitioner, a contractor, challenged the State's 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 argued that they were required to pay GST on works contracts entered into before the GST regime, which was not envisaged at the time of agreement. The State had issued revised guidelines on December 10, 2018, superseding earlier guidelines, to address issues related to works contracts under GST. These revised guidelines provided a procedure for determining the amount payable to contractors for works initiated before July 1, 2017, but executed partly or wholly thereafter.

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 July 1, 2017, where tenders were invited prior to that date? Petitioner's Contention: The petitioner argued that they are facing difficulties due to the change in tax regime and are required to pay GST on works contracts which was not anticipated when the agreements were made. They seek reimbursement of this additional tax burden. State's Contention: The State did not dispute the petitioner's position regarding the identical nature of the case with other writ petitions. The State had issued revised guidelines on December 10, 2018, to address such grievances, which provided a mechanism for calculating and reimbursing differential tax amounts under specific circumstances.