Kashish Developers Limited vs. The State Of Bihar

Held

The High 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. The Court directed the parties to appear before the Joint Commissioner on November 17, 2021. The Joint Commissioner was mandated to pass a decision within eight weeks from the date of appearance, after affording an opportunity of hearing to all parties and allowing them to place on record essential documents. The Joint Commissioner was to pass a speaking order assigning reasons. The Court explicitly stated that it had not expressed any opinion on the merits of the case 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. Conversely, if any amount was found payable by the petitioner, it was to be paid within two months thereafter.

Facts

The petitioner, Kashish Developers Limited, entered into an agreement for works contract on March 7, 2017, when the Bihar Value Added Tax Act, 2005 was in force. The petitioner paid VAT as per the Act. However, after the implementation of the Central Goods and Services Tax Act, 2017 (CGST Act) and Bihar Goods and Services Tax Act, 2017 (BGST Act) effective July 1, 2017, the petitioner was compelled to pay GST. The petitioner claims an excess tax payment of Rs. 37,976,754.64 for the financial year 2018-19, arising from the difference between the VAT received (Rs. 18,080,130) and the GST paid (Rs. 56,056,885) on the same contract. The petitioner sought directions for payment of this excess amount and other reliefs.

Key Issues

1. Whether the petitioner is entitled to a refund of the excess tax paid due to the transition from VAT to GST for a works contract executed prior to the GST regime, specifically concerning the applicability of File No. NRRDA-GO(17)32017-FA dated 06-06-2018 issued by the National Rural Infrastructure Development Agency? Petitioner's Argument: The petitioner contended that the agreement was executed under the VAT regime, and they received taxes as per the VAT Act. Post-GST implementation, they were forced to pay GST, leading to an excess payment of Rs. 37,976,754.64. They relied on the aforementioned NRRDA file to support their claim for adjustment or refund of the excess tax paid. Revenue's Argument: The judgment does not record any specific arguments made by the revenue or state respondents. However, the court's direction to the Joint Commissioner to pass an order implies that the revenue's stance would be considered during that adjudication process.