Jitendra Kumar Parida vs. State Of Odisha

Held

The Court acknowledged the petitioner's grievance regarding the differential tax amount due to the transition to GST for works contracts. The Court noted the submission of revised guidelines by the revenue/State, dated December 10, 2018, which provided a mechanism for calculating the GST-inclusive work value for the balance portion of works contracts executed after July 1, 2017, for tenders invited before that date. These guidelines stipulated that if the revised GST-inclusive work value for the balance work exceeded the original agreement work value for that balance work, the works contractor would be reimbursed for the excess amount. 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 in light of the aforesaid revised guidelines dated December 10, 2018, 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 could challenge it. No coercive action was to be taken against the petitioner until February 29, 2020.

Facts

The petitioner, a works contractor, filed a writ petition challenging the action of the opposite parties (revenue/State) in not reimbursing the differential tax amount arising from the transition of 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 envisaged in the original agreements. The revenue/State submitted revised guidelines issued by the Finance Department of the Government of Odisha on December 10, 2018, superseding earlier guidelines from December 7, 2017. These revised guidelines addressed the issue of works contracts executed partly or wholly after July 1, 2017, for tenders invited prior to 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 prior to July 1, 2017, but executed thereafter? (Question of law and fact, concerning the impact of GST on existing contracts). Petitioner's contention: The petitioner argued that the introduction of GST necessitated payment of taxes not originally contemplated in their agreements, leading to a financial burden, and thus sought reimbursement of the differential tax amount. Revenue/State's contention: The revenue/State submitted revised guidelines issued by the Finance Department, Government of Odisha, dated December 10, 2018. These guidelines provided a procedure for determining the GST-inclusive work value for balance work executed after July 1, 2017, and stipulated that the works contractor would be reimbursed if the revised GST-inclusive work value exceeded the original agreement value.