Kashish Developers Limited vs. The State Of Bihar

Held

The Court did not express any opinion on 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 (Respondent No. 3) to pass an appropriate order as required under the provisions of the Goods and Services Tax. The Court directed the parties to appear before Respondent No. 3 on November 17, 2021. Respondent No. 3 was mandated to take a decision within eight weeks from the date of appearance, after affording adequate opportunity of hearing to all concerned, including the writ petitioner, and allowing them to place on record essential documents and materials. A speaking order assigning reasons was to be passed and supplied to the parties. Liberty was reserved for the petitioner to challenge the order if required, and for parties to take recourse to other remedies. The Court clarified that 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 payable to the petitioner, it was to be refunded in accordance with Chapter -11 of the Value Added Tax Act, 2005. All issues were left open.

Facts

The petitioner, Kashish Developers Limited, entered into an agreement (No. 52SBD of 2016-17) on November 18, 2016, for a works contract. At the time of the agreement, Value Added Tax (VAT) was in force in Bihar. The petitioner received taxes as per the VAT Act. However, following the implementation of the Central Goods and Services Tax (CGST) Act and Bihar Goods and Services Tax (BGST) Act, 2017, effective July 1, 2017, the petitioner was compelled to pay GST. The petitioner claims to have paid an excess amount of Rs. 3,284,278.17 for the Financial Year 2017-18, calculated as the difference between the GST paid (Rs. 6,476,103.00) and the VAT received (Rs. 3,191,825.00). The petitioner sought a direction to the respondent authorities to pay this excess amount.

Key Issues

1. Whether the petitioner is entitled to a refund or adjustment 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 Agreement No. 52SBD of 2016-17 executed on November 18, 2016, under the provisions of the Central Goods and Services Tax Act, 2017 and Bihar Goods and Services Tax Act, 2017? Petitioner's Contention: The petitioner argued that since the agreement was executed when VAT was applicable, and they received taxes as per the VAT Act, they should not be burdened with the higher GST liability post-implementation. They claimed an excess payment of Rs. 3,284,278.17 and sought its recovery. They relied on File No. NRRDA-GO (17)32017-FA dated 06-06-2018 issued by the National Rural Infrastructure Development Agency. Revenue's Contention: The judgment does not record any specific arguments made by the revenue or state respondents.