Shashi Ram Mangaraj 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 instructed to consider and dispose of this representation in light of the revised guidelines dated December 10, 2018, issued by the Finance Department, Government of Odisha, as expeditiously as possible, preferably by February 29, 2020. The Court also stated that if the petitioner was 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 explicitly decide the entitlement to reimbursement but provided a procedural path for resolution based on the existing guidelines.

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 at the time of agreement. 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? Petitioner's contention: The petitioner argued that they are required to pay GST on works contracts that were agreed upon before the introduction of GST, leading to an unforeseen tax liability. They sought reimbursement for this differential tax amount. Revenue/State's contention: The State submitted that revised guidelines were issued on December 10, 2018, which provide a procedure for determining the amount payable to works contractors in such situations. These guidelines aim to address the claims of contractors for additional amounts towards GST on works tendered before July 1, 2017, but executed thereafter.