Kashish Development Limited vs. The State Of Bihar

Held

The Court disposed of the writ petition by directing the parties to appear before the Joint Commissioner, State Tax, Patna Central Circle, Patna, on November 17, 2021. The Joint Commissioner was directed to positively take a decision within eight weeks from the date of appearance, affording an opportunity of hearing to the parties to place on record all essential documents and materials. The respondent was to pass a fresh order only after adequate opportunity to all concerned, including the writ petitioner, and to decide the matter on merits expeditiously by passing a speaking order assigning reasons. Liberty was reserved for the petitioner to challenge the order if required, and for parties to take recourse to other available remedies. The Court explicitly stated that it had not expressed any opinion on 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; 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.

Facts

The petitioner, Kashish Development Limited, entered into an agreement (No. 52 SBD of 2016-17) on November 18, 2016, for works contract. At that time, the Bihar Value Added Tax Act, 2005, was in force, and the petitioner received taxes accordingly. Following the implementation of the Central Goods and Services Tax Act, 2017, and the Bihar Goods and Services Tax Act, 2017, effective July 1, 2017, the petitioner was required to pay GST. The petitioner claims to have paid excess tax amounting to Rs. 4,373,569.38 for the financial year 2018-19, calculated as the difference between the GST paid (Rs. 13,825,718.00) and the VAT received (Rs. 9,452,149.00). The petitioner sought a direction for the respondent authorities to pay this excess amount.

Key Issues

1. Whether the petitioner is entitled to a refund or adjustment of the difference between the Goods and Services Tax (GST) paid and the Value Added Tax (VAT) received, considering the contract was executed prior to the GST regime? (Question of law) Petitioner's Argument: The petitioner contended that since the agreement was executed in 2016 under the VAT Act, 2005, they should not be burdened with the higher tax liability under the GST Act, 2017, and are entitled to recover the excess tax paid. 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/State's Argument: The judgment records no specific argument from the respondent authorities regarding the petitioner's claim. However, the parties jointly prayed for the petition to be disposed of with a direction to the Joint Commissioner, State Tax, Patna Central Circle, Patna, to pass an appropriate order under the GST provisions.