Narottam Satapathy vs. The Principal Secretary Finance Dept.

Held

The Court noted that the issue involved had been decided in several earlier cases. The Court directed the petitioner to make a comprehensive representation before the appropriate authority within four weeks, detailing their grievance. The authority was then directed to consider and dispose of this representation expeditiously, preferably within three months from the receipt of a certified copy of the order, in light of the revised guidelines dated December 10, 2018, issued by the Finance Department, Government of Odisha. The petitioner was informed that if they were aggrieved by the authority's decision, they could challenge it. No coercive action was to be taken against the petitioner until March 31, 2020. The Court did not decide the merits of the petitioner's claim but provided a procedural path for its resolution.

Facts

The petitioner, a works contractor, filed a writ petition challenging the action of the opposite parties (State) in 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 the GST liability was not envisaged when the agreements were entered into. The State submitted that revised guidelines were issued by the Finance Department of the Government of Odisha on December 10, 2018, superseding earlier guidelines from December 7, 2017, to address issues related to works contracts under GST.

Key Issues

1. Whether the petitioner is entitled to reimbursement of the differential tax amount due to 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 resulted in an additional tax burden not anticipated at the time of entering into agreements. The State contended that the Government had issued revised guidelines on December 10, 2018, which provided a procedure for determining the payable amount to works contractors in such scenarios. These guidelines aimed to address the claims of contractors for additional amounts towards GST on works tendered before July 1, 2017, but executed after that date. The State relied on the Office Memorandum No. FIN-CTI-TAX-0045-2017/38535/F dated 10.12.2018.