Gagan Kumar Sahoo vs. State Of Odisha

Held

The Court acknowledged that the issue of reimbursement of differential tax amounts due to the GST transition for works contracts was a recurring one. It noted that the Government of Odisha had issued revised guidelines on December 10, 2018, to address the concerns of contractors. The Court directed the petitioner to make a comprehensive representation before the appropriate authority within four weeks, detailing their grievances. 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 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 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 works contracts entered into before the GST regime, which was not envisaged at the time of agreement. The State had issued initial guidelines on December 7, 2017, which were later superseded by revised guidelines on December 10, 2018, issued by the Finance Department of the Government of Odisha. These revised guidelines addressed the difficulties faced by contractors regarding works contracts under GST.

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? The petitioner argued that the introduction of GST resulted in an additional tax burden not contemplated in the original agreements, necessitating reimbursement. The State, while not disputing the petitioner's position, relied on the revised guidelines issued by the Finance Department. These guidelines, dated December 10, 2018, were issued in supersession of earlier guidelines and 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.