Kartik Chandra Swain vs. The Executive Engineer,Rural Works Division

Held

The Court noted that the issue involved in the writ petition had been decided in several earlier cases. The Court directed the petitioner to make a comprehensive representation before the appropriate authority within four weeks, ventilating their grievance. The authority was directed 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 was aggrieved by the authority's decision, they could challenge it. No coercive action was to be taken against the petitioner until February 29, 2020. The Court did not expressly decide the entitlement to reimbursement but provided a procedural path for resolution based on the existing guidelines.

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 originally envisaged. The State submitted that revised guidelines were issued by the Finance Department on December 10, 2018, superseding earlier guidelines, 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? Petitioner's contention: The petitioner argued that the introduction of GST resulted in an unforeseen tax liability for works contracts entered into under the previous VAT regime, and they should be compensated for this differential tax amount. They contended that the original agreement did not account for this new tax burden. Revenue/State's contention: The State submitted that revised guidelines were issued on December 10, 2018, by the Finance Department, Government of Odisha, which provide a mechanism 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.