Magu Charan Nayak vs. State Of Odisha

Held

The Court noted that the petitioner's writ petition was identical to W.P.(C) No.10797 of 2020, which was to be disposed of in terms of its order dated September 23, 2020. The Court acknowledged the difficulty faced by contractors due to the change in tax regime and the issuance of revised guidelines by the Government of Odisha on December 10, 2018. The Court directed the petitioner to make a comprehensive representation before the appropriate authority within four weeks, ventilating their grievance. The authority was then directed to consider and dispose of this representation in light of the revised guidelines dated December 10, 2018, as expeditiously as possible, preferably by December 18, 2020. 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 until December 18, 2020. The writ petition was disposed of with these directions.

Facts

The petitioner, a contractor, challenged the action of the opposite parties (State of Odisha and Commissioner of CGST) 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 being required to pay GST on works contracts entered into before the GST regime, which was not originally envisaged. The State Government had issued revised guidelines on December 10, 2018, superseding earlier guidelines from December 7, 2017, to address such issues faced by contractors. These revised guidelines provided a procedure for calculating the GST-inclusive work value for balance work executed after July 1, 2017, and for reimbursement or recovery of excess 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 executed partly or wholly after July 1, 2017, where tenders were invited prior to this date. Petitioner's contention: The petitioner argued that the introduction of GST resulted in an increased tax burden not contemplated at the time of entering into agreements, and therefore, they are entitled to reimbursement of the differential tax amount. They relied on the fact that their writ petition was identical to a previously filed one and sought disposal in terms of that order. Revenue/State's contention: The State of Odisha had issued revised guidelines on December 10, 2018, providing a framework for calculating the GST-inclusive work value for balance work and determining the amount payable to contractors. The State's counsel was present, and the revised guidelines were placed on record, indicating the State's position on how such claims should be processed.