Orissa High Court
Ramesh Chandra Pradhan vs State Of Odisha & Others on 25 August, 2022
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No. 3616 of 2020
Ramesh Chandra Pradhan .... Petitioner
Mr. Achyutananda Pattnaik, Advocate
-versus-
State of Odisha & Others .... Opposite Parties
None for O.P. Nos.1 to 4
Mr. Sunil Mishra, ASC for CT &
GST Organization for O.P. No.5
CORAM:
JUSTICE JASWANT SINGH
JUSTICE M.S. RAMAN
ORDER (Oral)
Order No.
25.08.2022
03. 1. This matter is taken up through virtual/physical mode.
2. Petitioner has prayed for the following reliefs by way
of the afore-noted writ petition:-
"(i) Declare the circular dated 07.12.2017 of the
Opposite Parties under Annexure-1 as ultravires,
illegal, unconstitutional and violative the 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 thereby
infringing the provisions of Goods and Services Tax
Act, 2017;
(ii) Further be pleased to pass an appropriate order
directing the Opposite Parties to restitute the 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 under Annexure-2."
3. It is the case of the Petitioner, works contractor, that
having been awarded the work "Construction of 'D' type Qtr at
GHD Sampad of Nuagaon Block under NHM for the year
2014-15 in the District of Nayagada", he executed agreement
bearing No. 37P1 of 2015-16 with Executive Engineer, Rural
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Works-II, Nayagada. By way of pleading, it is stated that
pursuant to clause 1(iii) of the Government of Odisha in
Finance Department vide Memo No.FIN-CT1-TAX-0045-
2017-36116/F dtd.07.12.2017, the Petitioner was instructed to
submit bills by reflecting GST component separately in respect
of the work executed after 01.07.2017, i.e., the date of
introduction of the Central Goods and Services Tax Act/ the
Odisha Goods Services Tax Act, 2017 (for short "the
CGST/OGST Act"). It is further submitted by the Petitioner
that the present matter is required to be considered in the light
of order dated 4th December, 2019 passed by this Court in the
case of Rakesh Kumar Behera Vrs. State of Odisha & Others,
W.P.(C) No. 22326 of 2019.
4. Since the copy of the agreement is not produced for
perusal, it is not forthcoming whether the work commenced
and concluded during 2015-16 or the same continued even after
introduction of the GST regime. It is also unclear from the
documents enclosed to the writ petition that any instruction has
been issued to the Petitioner to submit bill(s) indicating GST
component.
5. Be that as it may, in the batch of writ petitions being All
Odisha Contractors Associations Vrs. State of Odisha, W.P.(C)
No. 6178 of 2018, etc., etc., the aforesaid Finance Department
Office Memorandum dated 07.12.2017 was under challenge
before this Court. While the matters were pending, the Finance
Department brought out Revised Guidelines for works contract
vide office memorandum bearing No. 38535-FIN-CT1-TAX-
0045-2017/F., dated 10.12.2018. This Court while disposing of
the said batch of matters held as follows:-
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""*** In that view of the matter, the Petitioner shall
make a comprehensive representation before the
appropriate authority within four weeks from today
ventilating the grievance. If such a representation is
filed, the authority will consider and dispose of the
same, in the light of the aforesaid revised guidelines
dated 10th December, 2018 issued by the Finance
Department, Government of Odisha, as expeditiously
as possible, preferably by 31.03.2019.
If the petitioner(s) will be aggrieved by the decision of
the authority, it will be open for the petitioner(s) to
challenge the same.
No coercive action shall be taken against the
petitioner(s) till 31.03.2019.
The writ petition is disposed of accordingly."
5.1. Subsequently aforesaid direction of this Court
being carried out by the authority concerned, amongst
many, one of such works contractors viz. Harish Chandra
Majhi, by way of petition being W.P.(C) No.14924 of 2020,
challenged the Revised Guidelines vide Office
Memorandum No.38535-FIN-CT1-TAX-0045-2017/F.,
dated 10.12.2018 (Annexure-2). This Court disposed of said
case vide Judgment dated 07.06.2021 [reported as Harish
Chandra Majhi Vrs. State of Odisha and others, 2021 SCC
OnLine Ori 643 = (2021) 51 GSTL 113 = (2021) 93 GSTR
354 (Ori)] by observing thus:
"1. The Office Memorandum dated 10 December,
2018 of the Finance Department under Annexure-
3 prescribing guidelines for the implementation of
GST (Goods and Services Tax) in works contract
in post-GST regime with effect from 1 July, 2017,
the Revised Schedule of Rates-2014 (Revised SoR-
2014) under Annexure-8 and the demand notice
issued under Section 61 of the Odisha Goods and
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Services Act (OGST Act) has been questioned in
the present writ petition and connected batch of
cases. The prayers in the present petition read as
under:
'i. why the action and decision of the Opp.
Parties shall not be declared illegal,
unconstitutional and violative of legal right
of the Petitioner on account of the Taxes
being shared and borne by the Petitioner on
post enactment Goods and Services Tax Act,
2017?
ii. the Opp. Parties shall not be directed to
restitute the benefit of GST to the Petitioner
along with interest within a stipulated period
in respect of work in which the estimated was
prepared under VAT law.
iii. the Office Memorandum dated 10.12.2018
issued by the Opp. Party No. 4 under
Annexure-3 shall not be declared illegal,
arbitrary, unreasonable and same shall not
be quashed.
iv. further the process adopted by the Opp.
Parties in preparation of revised SoR dated
15.09.2017 under Annexure-8 shall not be
declared illegal, arbitrary and same shall not
be quashed.
under Annexure-9 shall not be declared
illegal, arbitrary and same shall not be
quashed?
vi. why the Opp. Party shall not be directed to
prepare a fresh schedule of rates considering
rapidly change of rate and price and
calculate the differential amount of GST on
the contract in which estimate was prepared
under VAT?'
// 5 //
***
11. The basic price of materials as per SoR-2014 was
inclusive of VAT, entry tax and other tax
components. Since 1 July 2017 GST is payable on
the value of the contract, the value of tax
components in the price of the materials in SoR-
2014 was revised and reduced by excluding such
tax components prevalent during pre-GST period.
As such, the revised SoR-2014 was issued on 16
September, 2017.
12. The Petitioner complains that the procedure
adopted in the preparation of the revised SoR-
2014 dated 16 September, 2017 (Annexure-8) is
illegal, arbitrary and contrary to the provisions of
Odisha Public Works Department Code (OPWD
Code) and that the rates have not been determined
on the basis of actual rates prevailing in different
areas of the State.
13. The said submission of the Petitioner is not found
acceptable because the rates of materials are to be
maintained uniformly all over the State. Further, if
there is any difference in the actual rate and
scheduled rate in any particular area, the
Petitioner could submit the same to the employer
and this has nothing to do with the GST.
14. A further ground urged on behalf of the Petitioner
is that the tender was floated prior to 1 July, 2017.
The price quoted for the items and labour was as
per the then prevailing market rate. Therefore, the
revised SoR-2014 brought into force on 1 July,
2017 at a reduced rate is illegal and
discriminatory.
15. This contention of the Petitioner is not found
convincing for the reason that, first, nothing has
been brought on record to show any comparison
of market rate in 2014 when SoR-2014 was issued
and the market rate in 2017 when revised SoR was
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issued. Secondly, no dispute has been raised
against the rates mentioned in pre-revised SoR-
2014. The price difference in the revised SoR-2014
is to the extent of the changed tax amount only.
Undoubtedly, the rates in revised SoR-2014 are
applicable for the works all over the State.
16. Works contract is a composite supply of services
and is taxable under the GST. The earlier SoR-
2014 issued on 10 November, 2014 was inclusive
of taxes like Central Excise Duty, Service Tax,
VAT, Entry Tax etc. After the GST regime only
some of the tax components needed to be included.
This necessitated a revision of SoR-2014 to arrive
at the GST exclusive work value. The GST
component is to be added to the work value. As the
revised SoR is exclusive of the tax components, the
estimated value of the work gets reduced to that
extent. This was prepared under the
recommendation of a Code Revision Committee
and after verification of tax rate in the pre-GST
period of each of the items including the hire
charges of machineries.
***
29. In the instant case, three components of the tax,
i.e., subject of tax, person liable to pay the tax and
rate of tax has been clearly defined in the statute.
The OM dated 10th December, 2018 only
prescribes the manner/procedure of calculation to
determine the amount of tax in a particular
eventuality in the transitional period of migration
to GST Act with effect from 1st July, 2017.
Consequently, the Court finds no merit in the
Petitioner's challenge to the said OM in law."
6. This Court upon scrutiny of the writ petition finds in the
cause title itself that the description of agreement itself shows
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2015-16, which is a clear indication that the work was required
to be commenced and concluded during this period. When pin
pointed question in this regard is asked to Mr. Achyutananda
Pattnaik, counsel for the Petitioner, he feigned ignorance.
Finding no alternative it is construed that the work executed
related to a period prior to introduction of CGST/OGST Act.
Therefore, the writ petition challenging the Office
Memorandum dtd.01.07.2017 is misconceived particularly
when Revised Office Memorandum has been considered by
this Court vide Judgment in Haris Chandra Majhi, (Supra).
Since the present writ petition has been filed before this
Court on 28th January, 2020, the second prayer of the Petitioner
for interest and compensation in respect of work executed
during 2015-16 appears to be stale claim.
6.1 This Court in identical situation being the case of
Chandra Sekhar Jena Vrs. State of Odisha and Others,
W.P.(C) No.23703 of 2021 vide Order dated 30.10.2021 held as
follows:
"1. Although learned counsel for the Petitioner seeks
to have the order similar to the one passed by this
Court on 13th January, 2021 in W.P.(C) No.23906
of 2020, it is seen 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. It is, therefore, not
possible to accede to the prayer of the Petitioner.
2. The writ petition is dismissed."
// 8 //
7. Notwithstanding the aforesaid finding, it is apposite to
make mention that even if the work executed turns out to be
commenced prior to introduction of GST regime and concluded
after the same is introduced, no relief as prayed for by the
Petitioner can be extended.
8. 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. This is what has been precisely laid down in
the case of M/s. Maa Vaishno Devi Construction Vrs. The
Executive Engineer, Bhubaneswar R&B Division-IV,
Bhubaneswar, W.P.(C) No.7956 of 2019 vide Order dated
22.02.2021.
9. In a case being Sri Lalit Kumar Mohanty Vrs. State of
Odisha, W.P.(C) No. 26646 of 2021 disposed of on 4th April,
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2022, 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. In
the result, in view of the aforesaid reasons, this Court finds no
ground to exercise its extraordinary jurisdiction under Article
226 of the Constitution of India and hence, the writ petition
deserves to be dismissed.
10. Accordingly, the writ petition is dismissed.
Issue urgent certified copy as per rules.
(Jaswant Singh) (M.S. Raman)
Judge Judge
Laxmikant August 25, 2022
Cuttack
