Dhabaleswar Pattanaik vs. State Of Odisha

Held

The Court acknowledged that the issue of difficulties faced by contractors due to the change in tax regime for works contracts under GST was a recurring one, with several writ petitions being filed on the matter. The Court noted the State's issuance of revised guidelines on December 10, 2018, which superseded earlier guidelines and provided a detailed procedure for determining the GST-inclusive work value for balance work executed after July 1, 2017, on contracts tendered before that date. 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 October 21, 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 October 21, 2020.

Facts

The petitioner, a 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 works contracts entered into before the GST regime, which was not originally envisaged. The State 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 balance work executed after July 1, 2017, on contracts 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 prior to July 1, 2017, but executed partly or wholly thereafter? Petitioner's contention: The petitioner argued that the introduction of GST resulted in an additional tax burden not contemplated at the time of entering into the agreements, and therefore, they should be reimbursed for this differential tax amount. They relied on the fact that similar writ petitions were being filed on this issue. Revenue/State's contention: The State did not dispute the petitioner's position regarding the similarity of the case to other pending writ petitions. The State placed reliance on the revised guidelines issued by the Finance Department on December 10, 2018, which provided a mechanism for addressing such claims.