Kashish Developers Limited vs. The State Of Bihar Through The Principal Chief Commissioner

Held

The Court disposed of the writ petition with specific directions to the Joint Commissioner, State Tax, Patna Central Circle, Patna (Respondent No. 3). The Petitioner and the respondents were directed to appear before Respondent No. 3 on November 17, 2021, at 10:30 A.M. Respondent No. 3 was mandated to take a decision within eight weeks from the date of appearance, after affording an opportunity of hearing to the parties to present all essential documents and materials. A fresh order was to be passed only after adequate opportunity to all concerned, including the writ petitioner. 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 within two months; conversely, if an amount was found payable by the petitioner, it was to be paid within two months. The judgment noted that the refund would be in accordance with Chapter 11 of the Value Added Tax Act, 2005.

Facts

Kashish Developers Limited (Petitioner) filed a writ petition before the Patna High Court challenging the imposition of GST on a works contract awarded in 2015, prior to the implementation of the Goods and Services Tax (GST) Act, 2017. The agreement was executed on August 6, 2015, when the Value Added Tax (VAT) Act, 2005, was in force. The Petitioner claims to have paid excess GST amounting to Rs. 44,71,251.19 for the Financial Year 2018-19, as they received total VAT of Rs. 14,933,520.00 but paid GST of Rs. 20,22,729.21. The Petitioner sought directions for the respondent authorities to pay the difference in tax. 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.

Key Issues

1. Whether the Petitioner is entitled to a refund or adjustment of the excess GST paid on a works contract awarded prior to the implementation of the GST Act, 2017, considering the agreement was executed under the VAT Act, 2005? Petitioner's Contention: The Petitioner argued that since the works contract was awarded and executed under the VAT Act, 2005, the imposition of GST from July 1, 2017, resulted in an excess tax liability. 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. They sought the payment of Rs. 44,71,251.19 as the excess amount of taxes paid. Revenue's Contention: The judgment records no specific argument from the revenue side regarding the merits of the Petitioner's claim. The revenue's counsel appeared, and the parties jointly requested a disposal with directions to the Joint Commissioner.