Subhraranjan Samal vs. The Executive Engineer, Jajpur Irrigation Division

Held

The Court noted that the present writ petition was identical to W.P.(C) No.10797 of 2020, which was disposed of by an order dated September 23, 2020. The Court acknowledged the revised guidelines issued by the Government of Odisha, Finance Department, on December 10, 2018, concerning works contracts under GST. These guidelines provide a procedure for determining the GST-inclusive work value for balance work executed after June 30, 2017, where tenders were invited before July 1, 2017. The Court directed the petitioner to 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 dated December 10, 2018, as expeditiously as possible, preferably by January 21, 2021. 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 January 21, 2021. The writ petition was disposed of accordingly.

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's grievance was that they were required to pay GST on works contracts entered into before the GST regime, which was not originally envisaged. The State had issued guidelines for works contracts under GST, which were later revised. The revised guidelines, issued on December 10, 2018, provided a procedure for determining the amount payable to works contractors for balance work executed after June 30, 2017, where tenders were invited before July 1, 2017, based on the pre-revised Schedule of Rates (SoR-2014).

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? (Question of mixed law and fact, turning on the interpretation and application of the revised guidelines). Petitioner's contention: The petitioner argued that they are facing difficulties due to the change in tax regime and are required to pay taxes not originally envisaged in their agreements. They sought reimbursement of the additional tax burden. Revenue's contention: The State did not dispute the petitioner's position regarding the identical nature of the present writ petition to a previously decided matter. The State relied on the revised guidelines issued by the Finance Department, Government of Odisha, dated December 10, 2018, which provided a framework for addressing such claims.