Kashish Developers Limited vs. The State Of Bihar

Held

The Court did not decide the merits of the case. Instead, it disposed of the petition with specific directions to the respondent No. 3, the Joint Commissioner, State Tax, Patna Central Circle, Patna. The parties were directed to appear before the Joint Commissioner on November 17, 2021. The Joint Commissioner was mandated to 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 was given 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 and payable by the petitioner, it was to be paid within two months thereafter, and conversely, if an amount was found payable to the petitioner, it was to be refunded in accordance with Chapter -11 of the Value Added Tax Act, 2005. The ratio decidendi is that when a dispute involves complex factual and legal issues regarding tax liability under a new regime for contracts predating it, the appropriate course is to direct the statutory authority to adjudicate the matter on merits after due process.

Facts

The petitioner, Kashish Developers Limited, entered into an agreement (No. 46 SBD of 2015-2016) on August 6, 2015, for works contract, when the Bihar Value Added Tax Act, 2005 was in force. The petitioner received taxes as per the VAT Act. Following the implementation of the Central Goods and Services Tax Act, 2017 (GST) effective July 1, 2017, the petitioner was required to pay GST. The petitioner claims an excess payment of Rs. 52,89,209.21 for the financial year 2017-18, arising from the difference between the total VAT received (Rs. 14,933,520.00) and the GST paid (Rs. 20,22,729.21). The petitioner sought directions for payment of this excess amount and any other consequential relief.

Key Issues

1. Whether the petitioner is entitled to a direction for payment of the difference/excess amount of tax paid after the implementation of the Central Bihar Goods and Services Tax Act, 2017, in light of a prior agreement executed when the Value Added Tax Act, 2005 was in force? (Mixed question of law and fact, concerning the applicability of GST provisions to pre-GST contracts and the calculation of tax liability). Petitioner's Contention: The petitioner argued that since the agreement was executed prior to the GST regime, and taxes were collected under the VAT Act, any excess tax paid under GST should be refunded or adjusted. 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. Revenue's Contention: The judgment records no specific argument from the revenue side regarding the petitioner's claim or the applicability of GST to pre-GST contracts. However, the parties jointly prayed for the petition to be disposed of with a direction to the respondent authorities to pass an appropriate order under the Goods and Services Tax provisions.