Mukesh Kumar vs. The Executive Engineer,Sambalpur

Held

The Court noted that the issue was identical to other writ petitions that had been filed on the same matter. The State had issued revised guidelines on December 10, 2018, which provided a mechanism for works contractors to claim reimbursement for the differential GST amount on contracts executed after the GST regime came into force but tendered before it. The Court directed the petitioner to make a comprehensive representation to the appropriate authority within four weeks, ventilating their grievance. The authority was instructed to consider and dispose of this representation expeditiously, preferably by November 20, 2020, in light of the revised guidelines dated December 10, 2018. 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 November 20, 2020. The writ petition was disposed of accordingly.

Facts

The petitioner, a works contractor, filed a writ petition challenging 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 The State had previously issued guidelines on December 7, 2017, which were later superseded by revised guidelines issued on December 10, 2018, by the Finance Department of the Government of Odisha. These revised guidelines addressed the issue of works contracts under GST, particularly for tenders invited before July 1, 2017, but executed partly or wholly after 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 prior to July 1, 2017, but executed thereafter? The petitioner argued that the introduction of GST imposed a tax liability that was not contemplated when the agreements were made, leading to a financial burden. They sought reimbursement for this differential tax amount. The State, through its learned Additional Government Advocate, did not dispute the petitioner's position that the matter was identical to other pending writ petitions. The State had issued revised guidelines on December 10, 2018, which provided a procedure for determining the GST-inclusive work value for balance work executed after July 1, 2017, and stipulated reimbursement if the revised value exceeded the original agreement value.