2022 (10) TMI 134 - HC - GST

GST circular constitutional challenge dismissed as disputed facts require alternative legal remedies not writ jurisdiction

Mahendra Oram Versus State of Odisha & Others

The Orissa HC dismissed a petition challenging the constitutional validity of a circular dated 07.12.2017 regarding GST tax sharing and reimbursement ... Constitutional Validity of circular dated 07.12.2017 - violation of fundamental rights of the Petitioner on account of the taxes being shared and borne by the Petitioner post the enactment of the Goods and Services Tax Act, 2017 - infringement of provisions of Goods and Services Tax Act, 2017 or not - restitution of benefits to the Petitioner along with interest and compensation within a stipulating period in terms of the order passed by the Hon’ble High Court - HELD THAT:- The question whether, in fact, any amount is owed to the Petitioner by the 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 the 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 being a disputed question of fact, the Court declines to undertake this exercise in the writ jurisdiction and leaves it to the Petitioner to seek other appropriate remedies available to him in accordance with law. In such proceedings it would be open to either of the parties to rely on the pleadings of the present petition. In a case being SRI LALIT KUMAR MOHANTY VERSUS STATE OF ODISHA & OTHERS [2022 (4) TMI 1453 - ORISSA HIGH COURT] the propriety of Revised Guidelines vide Office Memorandum dated 10th December, 2018 came up for consideration before this Court. This Court while disposing of the said writ petition declined to exercise writ jurisdiction. This Court finds no ground to exercise its extraordinary jurisdiction under Article 226 of the Constitution of India - Petition dismissed. Issues:1. Challenge to circular dated 07.12.2017 as ultravires, illegal, unconstitutional, and violative of fundamental rights under the Goods and Services Tax Act, 2017.2. Requirement to show GST component separately in bills for works executed after 01.07.2017.3. Dispute regarding the burden of additional tax on the petitioner due to GST.4. Validity of Office Memorandum dated 10.12.2018 revising guidelines for works contract post-GST regime.5. Claim for restitution of GST benefits with interest and compensation.6. Disputed question of fact regarding reimbursement of GST deducted from bills.Analysis:1. The petitioner, a works contractor, challenged a circular dated 07.12.2017, claiming it was ultravires and violated fundamental rights under the Goods and Services Tax Act, 2017. The petitioner argued that showing the GST component separately in bills for works executed after 01.07.2017 imposed an additional tax burden. However, the court noted that subsequent guidelines issued on 10.12.2018 revised the procedures, rendering the challenge to the earlier circular moot.2. The court considered the case of another works contractor challenging the revised guidelines in a similar matter. The petitioner questioned the legality of the Office Memorandum dated 10.12.2018, which prescribed guidelines for works contracts post-GST regime. The court found that the revised Schedule of Rates and the demand notice issued under the Odisha Goods and Services Act were valid, dismissing the petitioner's contentions.3. The court addressed the petitioner's claim for restitution of GST benefits with interest and compensation. It analyzed the changes in tax components post-GST implementation, emphasizing the need to calculate the tax amount during the transitional period accurately. The court found no merit in the petitioner's challenge to the Office Memorandum dated 10.12.2018, as it prescribed the calculation procedure for determining tax amounts during the migration to the GST Act.4. The court dismissed the writ petition challenging the validity of the Office Memorandum dated 07.12.2017, as subsequent developments had resolved the issues raised. It noted that the disputed question of whether any amount was owed to the petitioner on account of GST deductions had become a factual dispute, best resolved through other legal remedies available to the parties.5. In a related case, the court declined to exercise writ jurisdiction in considering the propriety of the Revised Guidelines under the Office Memorandum dated 10.12.2018. The court found no grounds to intervene through extraordinary jurisdiction under Article 226 of the Constitution of India, leading to the dismissal of the writ petition.6. Ultimately, the court dismissed the writ petition, recognizing the complex factual disputes regarding reimbursement of GST deductions and directing the parties to seek appropriate legal remedies for resolution.