Bhagawan Parida vs. State Of Odisha

Held

The Court noted that the issue was common to a batch of writ petitions concerning difficulties faced by contractors due to the change in the works contract regime under GST. The State of Odisha had issued revised guidelines on December 10, 2018, which provided a mechanism for determining the GST-inclusive work value for the balance work executed after July 1, 2017, and for reimbursement if the revised value was higher than the original agreement value. The Court directed the petitioner to make a comprehensive representation to the appropriate authority within four weeks, ventilating their grievance. The authority was 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 ordered that no coercive action would be taken against the petitioner until December 18, 2020. The writ petition was disposed of with liberty to the petitioner to challenge the authority's decision if aggrieved.

Facts

The petitioner, a works contractor, filed a writ petition challenging 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 was that they were required to pay GST on contracts entered into before the GST regime, which was not originally envisaged. The State of Odisha had issued revised guidelines on December 10, 2018, superseding earlier guidelines from December 7, 2017, to address such issues for works contracts executed partly or wholly after July 1, 2017, but tendered before that date.

Key Issues

1. Whether the petitioner is entitled to reimbursement of the differential tax amount due to the change in tax regime from VAT to GST for works contracts entered into before July 1, 2017, but executed after that date? Petitioner's contention: The petitioner argued that the introduction of GST resulted in an unforeseen tax liability for contracts entered into under the previous VAT regime. They sought reimbursement of this differential tax amount. The petitioner also submitted that the present writ petition was identical to W.P.(C) No.10797 of 2020 and should be disposed of in terms of the order passed therein. Revenue/State's contention: The State of Odisha had issued revised guidelines on December 10, 2018, providing a procedure for determining the GST-inclusive work value for the balance work executed after July 1, 2017, and for reimbursing contractors if the revised value exceeded the original agreement value. The revenue relied on these revised guidelines.