Facts of the Case

The petitioner, Deepak Kumar Das, a works contractor, approached the Orissa High Court challenging the validity of the Revised Guidelines relating to works contracts issued on 10.12.2018 after the implementation of the GST regime.

The petitioner contended that his contracts had originally been estimated under the VAT regime. After the introduction of GST from 01.07.2017, the State Government revised the Schedule of Rates (SoR-2014) by excluding embedded indirect taxes and requiring GST to be charged separately. According to the petitioner, this revision increased his GST burden and adversely affected works executed under earlier estimates.

The petitioner sought:

  • Declaration that the revised Office Memorandum was illegal and unconstitutional.
  • Restoration of alleged GST benefits with interest.
  • Fresh preparation of Schedule of Rates.
  • Restriction on GST recovery proceedings.
  • Recalculation of differential GST payable for contracts originally estimated under the VAT regime.

Issues Involved

  1. Whether the Revised Office Memorandum dated 10.12.2018 governing post-GST works contracts was unconstitutional or arbitrary.
  2. Whether contractors executing contracts prepared under the VAT regime were entitled to reimbursement of additional GST liability.
  3. Whether the Revised Schedule of Rates (SoR-2014) issued after GST implementation was legally sustainable.
  4. Whether the writ petition was maintainable despite earlier judicial decisions upholding the same guidelines.
  5. Whether the claim for GST reimbursement was barred by limitation.

Petitioner's Arguments

The petitioner submitted that:

  • Estimates were prepared under the VAT regime where taxes formed part of the Schedule of Rates.
  • After GST implementation, works contractors became liable to pay GST at applicable rates.
  • The revised Schedule of Rates failed to adequately compensate contractors for the increased GST liability.
  • The Office Memorandum dated 10.12.2018 was arbitrary and contrary to law.
  • The revised Schedule of Rates should be recalculated considering prevailing market prices.
  • Differential GST ought to be reimbursed along with interest.

Respondent's Arguments

The State opposed the writ petition by submitting that:

  • The validity of the very same Office Memorandum had already been upheld by the Orissa High Court in Harish Chandra Majhi v. State of Odisha.
  • Earlier litigation involving All Orissa Contractors Association had also resulted in similar findings.
  • The revised Schedule of Rates merely removed pre-GST embedded taxes and prescribed the correct methodology for GST calculation.
  • The petitioner's challenge was fully covered by previous binding precedents.
  • The contracts had already been completed in 2017 and any monetary claim had become barred by limitation.
  • Questions relating to GST reimbursement involved disputed facts unsuitable for adjudication under Article 226.

Court Order / Findings

The Orissa High Court dismissed the writ petition and held that:

1. Validity of Revised Guidelines Already Settled

The Court observed that identical issues had already been decided in Harish Chandra Majhi v. State of Odisha, where the Revised Office Memorandum dated 10.12.2018 had been upheld.

Accordingly, there was no reason to reconsider the legality of the guidelines.

2. Revised SoR Was Legally Justified

The Court held that after the implementation of GST:

  • Earlier tax components such as VAT, Service Tax, Entry Tax and Excise Duty were excluded from SoR.
  • GST was intended to be charged separately.
  • Therefore, the revised Schedule of Rates was merely a consequence of the new taxation structure and could not be termed arbitrary.

3. GST Calculation Methodology Was Valid

The Court observed that the Office Memorandum merely prescribed the method for calculating GST during the transition from the VAT regime to GST.

It neither imposed a new tax nor altered statutory tax liability.

4. Claim Was Barred by Limitation

The Court noted that:

  • The contracts had been completed during 2017.
  • The writ petition was filed much later.
  • Therefore, the monetary claim for GST reimbursement had become time-barred.

The Court relied upon its earlier decision in Chandra Sekhar Jena v. State of Odisha.

5. Writ Jurisdiction Cannot Decide Disputed Monetary Claims

The Court further held that:

  • Determination of actual GST liability involves disputed factual issues.
  • Such factual examination cannot ordinarily be undertaken in writ jurisdiction under Article 226.
  • If any monetary claim survives, the petitioner may pursue appropriate remedies available under law.

Accordingly, the writ petition was dismissed.

Important Clarification

This judgment reiterates that:

  • The Odisha Government's Revised Works Contract Guidelines dated 10.12.2018 remain legally valid.
  • The Revised Schedule of Rates issued after GST implementation is not unconstitutional merely because GST is charged separately.
  • Contractors cannot reopen settled issues already decided by earlier High Court judgments.
  • Claims for GST reimbursement must be filed within the prescribed limitation period.
  • Disputed calculations regarding GST reimbursement generally cannot be adjudicated under Article 226 and must be pursued before the appropriate forum.

Sections

  • Article 226 of the Constitution of India
  • Central Goods and Services Tax Act, 2017
  • Odisha Goods and Services Tax Act, 2017
  • Section 61 of the Odisha Goods and Services Tax Act, 2017
  • Revised Guidelines for Works Contract dated 10.12.2018
  • Revised Schedule of Rates (SoR-2014)
  • Office Memorandum No.38535-FIN-CT1-TAX-0045-2017/F dated 10.12.2018

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785563430_2473compressed.pdf  

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