2022 (9) TMI 371 - HC - GST

GST reimbursement claim for works contract dismissed as time-barred and outside writ jurisdiction

The Orissa HC dismissed a writ petition seeking GST reimbursement from government authorities for a works contract. The petitioner's claim was barred by ... Validity of administrative guidelines/Office Memorandum on post-GST works contract valuation - Revision of Schedule of Rates to exclude pre-GST tax components - Limitation bar to restitution claims - Mandamus under Article 226-scope and limitations for monetary claims - Denial of judicial computation of disputed factual monetary claims in writ jurisdictionValidity of administrative guidelines/Office Memorandum on post-GST works contract valuation - Revision of Schedule of Rates to exclude pre-GST tax components - The challenge to the Office Memorandum dated 10.12.2018 and the Revised Schedule of Rates-2014 was not maintainable on merits because the same had already been upheld by this Court in earlier decisions. - HELD THAT: - The Court noted that the Revised SoR-2014 was issued to arrive at GST-exclusive work values by excluding tax components that existed pre-GST and that the Office Memorandum of 10.12.2018 prescribed the manner of calculation in the transitional period. The Court relied on its prior reasoning in Harish Chandra Majhi v. State of Odisha and the order in All Orissa Contractors Association v. State of Odisha which had considered and upheld the Revised SoR and the Office Memorandum. Having perused those authorities and the guidelines, the learned counsel for the petitioner conceded the position and the Court accepted the opposite parties' submission that the earlier decisions set at rest the grounds of challenge to the impugned Memorandum and Revised SoR. [Paras 5, 6]The challenge to the Office Memorandum dated 10.12.2018 and to the Revised SoR-2014 is rejected as lacking merit in view of earlier decisions upholding the impugned measures.Limitation bar to restitution claims - The petitioner's claim for restitution of GST benefit is time-barred and therefore not maintainable. - HELD THAT: - The Court examined the agreements appended to the petition and noted the dates of completion of works in 2017. Relying on the principle applied in Chandra Sekhar Jena v. State of Odisha, where similar claims arising from pre-GST contracts were held to be time-barred, the Court found that the cause of action for restitution had become barred by limitation. Consequently, the petitioner cannot seek restitution of GST benefits at this stage. [Paras 7, 8]The claim for restitution of GST benefit is barred by limitation and the writ petition is dismissed on that ground.Mandamus under Article 226-scope and limitations for monetary claims - Denial of judicial computation of disputed factual monetary claims in writ jurisdiction - The High Court declined to exercise writ jurisdiction to compute or determine disputed factual monetary claims for GST reimbursement and left the petitioner to pursue appropriate remedies. - HELD THAT: - The Court observed that determining the quantum of GST liability or alleged amounts owed involves highly disputed questions of fact and is essentially a claim for money. It held that the power under Article 226 is not suited to undertake case-by-case computation of which components of work qualify for reimbursement of GST. The Court therefore refused to calculate or order restitution in the writ petition and directed the petitioner to pursue other appropriate remedies where factual and quantification issues can be ventilated and adjudicated. [Paras 9]The Court will not exercise its writ jurisdiction to compute or adjudicate disputed factual monetary claims for GST; the petitioner may seek other remedies in accordance with law.Final Conclusion: Writ petition dismissed: the impugned Office Memorandum and Revised SoR-2014 stand upheld in view of prior decisions; the petitioner's restitution claim is time-barred; and the Court declines to undertake factual/monetary computations in writ jurisdiction, leaving the petitioner to pursue alternate remedies. Issues Involved:1. Propriety of Revised Guidelines relating to works contract issued by the Government of Odisha.2. Legality and constitutionality of the Office Memorandum dated 10.12.2018.3. Restitution of GST benefit to the petitioner.4. Preparation of a fresh schedule of rates considering the change in rates and prices.5. Coercive actions against the petitioner regarding GST recovery.Detailed Analysis:1. Propriety of Revised Guidelines relating to works contract issued by the Government of Odisha:The petitioner challenged the Revised Guidelines issued by the Government of Odisha in Finance Department through Office Memorandum dated 10.12.2018. The guidelines required that incomplete or balance work be estimated by excluding the GST component as per the Revised Schedule of Rates, 2014 (SoR, 2014). The petitioner argued that the guidelines were arbitrary and increased the liability under the GST regime.2. Legality and constitutionality of the Office Memorandum dated 10.12.2018:The petitioner sought to declare the Office Memorandum dated 10.12.2018 as illegal, arbitrary, and unreasonable. The Court referenced previous judgments, including the case of Harish Chandra Majhi Vrs. State of Odisha, where the validity of the Office Memorandum was upheld. The Court found no merit in the petitioner's challenge, noting that the guidelines were a procedural measure for calculating tax during the transition to the GST regime.3. Restitution of GST benefit to the petitioner:The petitioner requested the restitution of the GST benefit along with interest for work estimated under VAT law. The Court observed that the claim was time-barred, as the agreements were completed in 2017. The Court referenced the case of Chandra Sekhar Jena Vrs. State of Odisha, where similar claims were dismissed due to the statute of limitations.4. Preparation of a fresh schedule of rates considering the change in rates and prices:The petitioner argued that the revised SoR-2014 was arbitrary and requested a fresh schedule of rates. The Court found that the revised SoR-2014 was prepared to exclude pre-GST tax components and was applicable uniformly across the state. The Court did not find the petitioner's contention convincing, as the revised rates accounted for the changed tax amount only.5. Coercive actions against the petitioner regarding GST recovery:The petitioner sought to restrain the authorities from taking coercive steps to recover the GST amount. The Court stated that determining the quantum of GST liability is within the authority vested by the CGST/OGST Act and not within the Court's jurisdiction under Article 226 of the Constitution. The Court declined to undertake this exercise, leaving it to the petitioner to seek appropriate remedies through other legal avenues.Conclusion:The writ petition was dismissed on grounds of being time-barred and lacking merit. The Court upheld the validity of the Office Memorandum dated 10.12.2018 and declined to exercise its power under Article 226 of the Constitution. The petitioner was advised to seek other appropriate remedies available in accordance with the law.