Kashish Developmers 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 respondent No. 3, the Joint Commissioner, State Tax, Patna Central Circle, Patna, to pass an appropriate order. The Court directed the parties 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 to place on record 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 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

Kashish Developers Limited (the petitioner) entered into a works contract agreement (No. 05 SBD of 2015-2016) on August 10, 2015, 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/Bihar Goods and Services Tax Act, 2017, effective July 1, 2017, the petitioner claims to have been compelled to pay GST. The petitioner sought directions for the respondent authorities to pay the difference/excess tax paid, amounting to Rs. 11,039,901.02, for the financial year 2017-18, asserting that the VAT received was Rs. 3,818,836.00, while GST paid was Rs. 14,858,737.02. The petition was filed before the Patna High Court.

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 an agreement executed prior to the GST regime? Petitioner's Argument: The petitioner argued that the agreement was executed on August 10, 2015, under the VAT Act, 2005. They received taxes as per the VAT Act. However, after the implementation of the GST Act, 2017, they were forced to pay GST, resulting in an excess payment of Rs. 11,039,901.02 for the financial year 2017-18. 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 respondents. 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 provisions of the Goods and Services Tax.