M/S.P.M.Contractors,PVT.LTD vs. The Executive Engineer,Rural Works Division
Held
The Court disposed of the writ petition by directing the petitioner to make a comprehensive representation before the appropriate authority within four weeks. This representation should detail the petitioner's grievance regarding the differential tax amount. The authority is then mandated to consider and dispose of this representation expeditiously, preferably by February 29, 2020, in light of the revised guidelines issued by the Finance Department on December 10, 2018. The Court also stipulated that no coercive action would be taken against the petitioner until February 29, 2020. If the petitioner remains aggrieved by the authority's decision, they are at liberty to challenge it further. The Court did not decide the substantive claim but provided a procedural path for its resolution.
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 from 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 in the original agreements. The State submitted that revised guidelines were issued by the Finance Department on December 10, 2018, superseding earlier guidelines from December 7, 2017, to address such issues concerning 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 after that date? The petitioner argued that the introduction of GST resulted in an additional tax burden not contemplated at the time of entering into agreements, and they should be compensated for this differential tax amount. The State contended that revised guidelines were issued by the Finance Department on December 10, 2018, which provide a procedure for determining the payable amount to works contractors in such scenarios. These guidelines aim to address the claims for additional amounts towards GST for works tendered before July 1, 2017, but executed thereafter.
Sections Cited
Not specified
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18.12.2019
Heard Ms. K.B. Roy Choudhury, learned counsel for the petitioner and learned Additional Government Advocate for the State-opposite parties.
By way of this writ petition, in substance, petitioner has challenged the action of the opposite parties in not reimbursing the differential tax amount arising out of change in tax regime from Value Added Tax (VAT) to Goods and Service Tax (GST) with effect from 01.07.2017. 3. Since the issue involved in this case has already been decided by us earlier in a number of cases, no purpose will be served by keeping the writ petition pending. Therefore, in the interest of justice, this writ petition is disposed of in terms of the order passed earlier in similar matters.
Batch of writ petitions were being filed on this issue. The main issue involved in such matters is that the difficulty faced by the contractors due to change in the regime regarding works contract under GST. The grievance of the petitioner is that in view of the introduction of the GST, petitioner is required to pay tax which was not envisaged while entering into the agreement.
Learned Addl. Governm
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