2022 (8) TMI 391 - HC - GST

Works contract GST reimbursement claims from 2016 dismissed as time-barred under Article 226

HC dismissed the writ petition on grounds of limitation, holding that claims arising from a works contract dated April 2016 with 11-month completion ... Works Contract - estimation of value - contract period was extended beyond 01.07.2017 and execution of works was completed during GST regime - time limitation - HELD THAT:- The instant matter being similar to that of the case decided by this Court in CHANDRA SEKHAR JENA VERSUS STATE OF ODISHA AND OTHERS [2021 (10) TMI 1350 - ORISSA HIGH COURT], where it was held that the agreement in question is dated 26th April, 2016 with the time for completion being 11 months. Clearly, therefore, any claim now raised arising from the said contract would be time barred - The present writ petition is hereby dismissed in the similar fashion and, thus, this Court hold that the claim of the petitioner is hit by law of limitation. This Court wishes to observe that the petitioner has made a prayer to restrain the opposite party No.5-CT&GST Assessment Unit, Rairangpur, CT&GST Circle, Mayurbhanj, from taking any coercive steps against the petitioner to recover amount of GST. Qua such a prayer, it is noteworthy to record that the task of determining the differential GST, i.e. segregating labour, material, etc. is of the Authority vested with power under the CGST/OGST Act and not within the domain of any other. Such segregation can be made keeping in view inter alia Revised Guidelines dated 10th December 2018 issued by the Finance Department, Government of Odisha - The question whether, in fact, any amount is owed to the Petitioner by Opposite Parties on account of GST deducted from its bills or vice versa, has become a highly disputed question of fact. The claim of the Petitioner ultimately, in simple terms, is one for money which it seeks as reimbursement from Opposite Parties. It is not possible for this Court in its writ jurisdiction under Article 226 of the Constitution to calculate on a case to case basis which component of the work executed by the Petitioner for reimbursement on account of GST and which is not. This court while declining to exercise its power under Article 226 of the Constitution, dismisses the writ petition. Issues Involved:1. Propriety of Revised Guidelines for works contract issued on 10.12.2018.2. Legality and constitutionality of actions and decisions of the opposite parties.3. Restitution of GST benefits to the petitioner.4. Legality of the Office Memorandum dated 10.12.2018.5. Preparation of a fresh schedule of rates considering GST changes.6. Restraining coercive action against the petitioner for GST recovery.Issue-Wise Detailed Analysis:1. Propriety of Revised Guidelines for works contract issued on 10.12.2018:The petitioner challenged the Revised Guidelines issued by the Government of Odisha on 10.12.2018, arguing that the guidelines were not in conformity with the GST Act and resulted in the petitioner bearing the tax burden. The petitioner sought a writ of mandamus for various reliefs, including the declaration of the guidelines as illegal and arbitrary. The court referenced previous judgments, including All Orissa Contractors Association v. State of Odisha and Harish Chandra Majhi v. State of Odisha, which upheld the guidelines, and found no merit in the petitioner’s challenge.2. Legality and constitutionality of actions and decisions of the opposite parties:The petitioner contended that the actions and decisions of the opposite parties were illegal and unconstitutional, infringing on the petitioner’s legal rights under the GST Act. The court noted that similar challenges had been previously addressed and dismissed, reaffirming the legality of the actions and decisions of the opposite parties.3. Restitution of GST benefits to the petitioner:The petitioner sought restitution of GST benefits along with interest for works where estimates were prepared under VAT law. The court found the claim to be time-barred, noting that the agreements in question had stipulated completion dates before the enforcement of GST statutes. The court referenced the case of Chandra Sekhar Jena v. State of Odisha, where a similar claim was dismissed for being time-barred.4. Legality of the Office Memorandum dated 10.12.2018:The petitioner argued that the Office Memorandum dated 10.12.2018 was illegal and arbitrary. The court, referencing previous judgments, upheld the legality of the memorandum, stating that it prescribed the manner of calculating tax during the transitional period to the GST regime and did not violate any legal provisions.5. Preparation of a fresh schedule of rates considering GST changes:The petitioner requested the preparation of a fresh schedule of rates to account for the changes in GST rates. The court noted that the revised Schedule of Rates (SoR) issued on 16.09.2017 already accounted for the exclusion of pre-GST tax components and that the petitioner failed to provide evidence of discrepancies in the market rates. The court found no merit in the petitioner’s request for a fresh SoR.6. Restraining coercive action against the petitioner for GST recovery:The petitioner sought to restrain the opposite party from taking coercive steps to recover the GST amount. The court stated that the determination of differential GST is within the authority of the CGST/OGST Act and not within the court’s domain. The court declined to exercise its writ jurisdiction to resolve the highly disputed factual question of GST reimbursement and advised the petitioner to seek other appropriate legal remedies.Conclusion:The court dismissed the writ petition, finding no merit in the petitioner’s claims. The court upheld the legality of the Revised Guidelines and the Office Memorandum dated 10.12.2018, reaffirmed the actions and decisions of the opposite parties, and concluded that the petitioner’s claims for restitution of GST benefits were time-barred. The court declined to restrain coercive action against the petitioner and advised seeking other legal remedies for disputed GST reimbursement claims.