Narottam Satapathy vs. The Principal Secretary Finance Dept

Held

The Court acknowledged that the issue had been decided in previous similar cases. The Court directed the petitioner to make a comprehensive representation before the appropriate authority within four weeks, detailing their grievance. The authority is then required to consider and dispose of this representation in light of the revised guidelines dated December 10, 2018, issued by the Finance Department of the Government of Odisha. This disposal should be done expeditiously, preferably within three months from the receipt of a certified copy of the Court's order. The petitioner retains the right to challenge the authority's decision if aggrieved. No coercive action is to be taken against the petitioner until March 31, 2020. The Court did not expressly leave any issue undecided, but rather provided a procedural path for 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 July 1, 2017. The petitioner's grievance was that the GST liability was not anticipated when entering into agreements for works contracts. 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. These revised guidelines provide a procedure for determining the payable amount to works contractors for balance work executed after July 1, 2017, based on tenders invited before that date.

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 before 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 which was not envisaged at the time of entering into the agreement, leading to a financial burden. They sought reimbursement of this additional tax liability. Revenue/State's contention: The State contended that revised guidelines were issued by the Finance Department on December 10, 2018, which provide a mechanism for calculating and reimbursing the differential tax amount for works contracts executed after the GST implementation, based on tenders invited prior to July 1, 2017. The State relied on the Office Memorandum No. FIN-CTI-TAX-0045-2017/38535/F dated 10.12.2018.