Kashish Developers Limited vs. The State Of Bihar

Held

The Court did not decide the merits of the case. Instead, the parties jointly prayed for the petition to be disposed of with a direction to the Joint Commissioner, State Tax, Patna Central Circle, Patna (Respondent No. 3) to pass an appropriate order under the provisions of the Goods and Services Tax. The Court directed the parties to appear before Respondent No. 3 on November 17, 2021. Respondent No. 3 was instructed to positively take a decision within eight weeks from the date of appearance, after affording an opportunity of hearing to the parties and allowing them to place on record all essential documents and materials. A fresh order was to be passed only after adequate opportunity to all concerned. The Court explicitly stated that it had not expressed any opinion on the merits and all issues were left open. If any amount was found due to the petitioner, it was to be refunded in accordance with Chapter -11 of the Value Added Tax Act, 2005.

Facts

The petitioner, Kashish Developers Limited, entered into an agreement (No. 04 SBD of 2017-18) on June 24, 2017, for works contract. At the time of agreement, the Bihar Value Added Tax Act, 2005 was in force. The petitioner received taxes as per the VAT Act. However, following the implementation of the Central Goods and Services Tax Act, 2017 (GST) effective July 1, 2017, the petitioner was compelled to pay GST. The petitioner claims to have paid an excess amount of Rs. 89,75,100.89 in GST for the financial year 2017-18, compared to the VAT amount received. The petitioner sought directions for payment of this excess tax amount.

Key Issues

1. Whether the petitioner is entitled to a refund or adjustment of the excess GST paid on a works contract executed prior to the implementation of the GST Act, 2017, where the agreement was governed by the Value Added Tax Act, 2005? The petitioner argued that the agreement was executed when the VAT Act was in force, and they received taxes as per VAT. They contend that after the GST Act's implementation, they were forced to pay GST, resulting in an excess payment of Rs. 89,75,100.89. They relied on File No. NRRDA-GO (17)32017-FA dated 06-06-2018 issued by the National Rural Infrastructure Development Agency, Ministry of Rural Development, Government of India, to support their claim for the difference in tax. The respondents did not record any specific arguments in the judgment.