Krushna Chandra Behera vs. The Executive Engineer

Held

The Court noted that the issue involved difficulties faced by contractors due to the change in tax regime for works contracts under GST. The State had issued revised guidelines on December 10, 2018, to address representations from contractors claiming additional amounts towards GST for works tendered before July 1, 2017, but executed thereafter. 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 by December 18, 2020. The Court also stated that if the petitioner was aggrieved by the authority's decision, they could 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 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 stemmed from being required to pay GST on works contracts entered into before the GST regime, which was not initially envisaged. The State of Odisha 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 determining the GST-inclusive work value for the balance work executed after July 1, 2017, and stipulated reimbursement if the revised value exceeded the original agreement value.

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 the writ petition was identical to a previously filed case (W.P.(C) No.10797 of 2020) and should be disposed of in terms of the order passed therein. The core grievance was the financial burden of paying GST on contracts where such tax was not contemplated at the time of agreement. Revenue/State's contention: The State submitted revised guidelines issued by the Finance Department on December 10, 2018, which provided a framework for addressing the claims of contractors regarding GST on works contracts. These guidelines outlined a procedure for calculating the revised GST-inclusive work value and determining reimbursement or recovery.