2023 (9) TMI 266 - HC - GST

Additional tax liability - execution of subsisting Government contracts either awarded in the pre-GST regime or in the post GST regime without updating the Schedule of Rates (SOR) incorporating the applicable GST - to neutralize the impact of unforeseen additional tax burden on Government contracts since the introduction of GST w.e.f. 1st July, 2017 for ongoing contract - HELD THAT - The impugned order of the appellate authority dismissing the appeal of the petitioner purely on technical ground of delay of four days without going into the merit of the appeal in question, the same is set aside and the matter is remanded back to the appellate authority concerned to consider and dispose of the aforesaid appeal in question on merit and in accordance with law by passing a reasoned and speaking order after giving an opportunity of hearing to the petitioner or its authorities representatives within a period of twelve weeks from the date of communication of this order. Petition disposed off.

Summary

Issues:
1. Relief sought for bearing additional tax liability in government contracts pre and post-GST.
2. Relief sought for neutralizing unforeseen tax burden on ongoing contracts.
3. Updating State Schedule of Rates (SOR) to incorporate applicable GST.
4. Challenge against appellate authority's order based on limitation grounds.

Analysis:
1. The petitioner filed a writ petition seeking direction for the concerned authority to bear the additional tax liability in government contracts awarded pre and post-GST without updating the Schedule of Rates (SOR) to include applicable GST in the Bill of Quantities (BOQ). The court disposed of the petition, allowing the petitioner to file representations before the Additional Chief Secretary, Finance Department, Government of West Bengal within four weeks. The Additional Chief Secretary is directed to make a final decision within four months after consulting relevant departments and considering all judgments of different High Courts referred to by the petitioner. No coercive action shall be taken against the petitioner until a final decision is made. Failure to file representations within the stipulated time will render the order ineffective.

2. The petitioner also sought relief to neutralize the impact of unforeseen additional tax burden on ongoing government contracts post-GST introduction. The court directed that the Additional Chief Secretary, while deciding on the representations, should act in accordance with the law, pass a reasoned order, and consider all relevant judgments cited by the petitioner. The petitioner is granted an opportunity for a hearing before the Additional Chief Secretary.

3. Additionally, the petitioner challenged an appellate authority's order dated 1st September 2022 under the WBGST Act, which dismissed the appeal on the grounds of a four-day delay. The court set aside the appellate authority's order and remanded the matter back for reconsideration on merit and in accordance with the law. The appellate authority is directed to pass a reasoned order after giving an opportunity of hearing to the petitioner or its representatives within twelve weeks from the date of communication of the court's order.

4. The writ petition, WPA 28435 of 2022, is disposed of with the aforementioned observations and directions, providing relief to the petitioner in terms of addressing the additional tax liability in government contracts, neutralizing unforeseen tax burdens, and challenging the appellate authority's order based on limitation grounds.