M/S.P.M.Contractors PVT.LTD vs. The Executive Engineer, Rural Works Division-Ii

Held

The Court noted that the issue involved had been decided in several previous cases. The Court directed the petitioner to make a comprehensive representation to the appropriate authority within four weeks, detailing their grievance. The authority was instructed to consider and dispose of this representation expeditiously, preferably by February 29, 2020, in light of the revised guidelines dated December 10, 2018, issued by the Finance Department, Government of Odisha. 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 February 29, 2020. The Court did not expressly leave any issue undecided, as the matter was disposed of based on the existing guidelines and a procedural direction.

Facts

The petitioner, a contractor, challenged the State's action in 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 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 related to 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 led to an unforeseen tax liability on works contracts that were already agreed upon under the previous VAT regime. The petitioner sought reimbursement of this additional tax burden. The State contended that revised guidelines were issued on December 10, 2018, by the Finance Department, Government of Odisha, to address the concerns of contractors regarding works contracts under GST. These guidelines provided a procedure for determining the tax-inclusive work value for balance work executed after July 1, 2017, and stipulated reimbursement if the revised value exceeded the original agreement value.