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

Held

The Court acknowledged the revised guidelines issued by the Finance Department, Government of Odisha, on December 10, 2018, which provide a framework for calculating the GST-inclusive work value for balance work executed after the GST implementation. The Court directed the petitioner to make a comprehensive representation before the appropriate authority within four weeks, detailing their grievance. The authority is then mandated to consider and dispose of this representation in light of the aforementioned revised guidelines, preferably by February 20, 2020. The Court also stated that if the petitioner remains aggrieved by the authority's decision, they are at liberty to challenge it. No coercive action was to be taken against the petitioner until February 20, 2020. The issue of reimbursement was effectively deferred to the administrative authority for decision based on the new 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 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 originally envisaged. The State government, in response, submitted revised guidelines dated December 10, 2018, superseding earlier guidelines from December 7, 2017. These revised guidelines address how to handle works contracts tendered before July 1, 2017, but executed partly or wholly after that date, detailing procedures for calculating GST-inclusive work values and reimbursement.

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 thereafter. Petitioner's Contention: The petitioner argued that the introduction of GST necessitated payment of tax that was not contemplated when the agreements were made, leading to a financial burden. They sought reimbursement of this differential tax amount. Revenue/State's Contention: The State submitted revised guidelines dated December 10, 2018, issued by the Finance Department, Government of Odisha. These guidelines provide a procedure for determining the GST-inclusive work value for balance work executed after July 1, 2017, and stipulate reimbursement of excess amounts if the revised value exceeds the original agreement value. The State relied on these revised guidelines as the basis for addressing the petitioner's grievance.