M/S. Biraja Construction vs. State Of Odisha

Held

The Court held that the petitioner should make a comprehensive representation before the appropriate authority within four weeks, ventilating their grievance. The authority is to consider and dispose of this representation in light of the revised guidelines issued by the Finance Department, Government of Odisha, vide Office Memorandum No. FIN-CTI-TAX-0045-2017/38535/F dated December 10, 2018. The disposal is to be done expeditiously, preferably within three months. 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 for three months. The writ petition was disposed of accordingly.

Facts

The petitioner, a works 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's grievance was that they were required to pay GST on 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 from December 7, 2017, to address difficulties faced by contractors regarding works contracts under GST. These revised guidelines provided a procedure for determining the GST-inclusive work value for balance work executed after July 1, 2017, and for reimbursement or recovery of 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 July 1, 2017, but executed partly or wholly thereafter? Petitioner's contention: The petitioner argued that they are facing difficulties due to the introduction of GST, as they are required to pay tax that was not anticipated when the agreements were made. They relied on the fact that the State has issued revised guidelines to address such issues, implying an acknowledgment of the problem. State's contention: The State did not dispute the petitioner's position and accepted notice. The State had issued revised guidelines dated December 10, 2018, which provided a mechanism for calculating and reimbursing the differential tax amount for works executed post-GST, based on pre-GST agreements.