2024 (1) TMI 917 - HC - GST

Additional tax liability for 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) - issuance of direction upon the respondents authority concerned 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 awarded - HELD THAT - This writ petition is disposed of by giving liberty to the petitioner to file appropriate representation in the aforesaid regard as referred in preceding paragraph of this order, before the Additional Chief Secretary, Finance Department, Government of West Bengal within four weeks from date. On receipt of such representation the Additional Chief Secretary, Finance Department shall take a final decision within four months from the date of receipt of such representation after consulting with all other relevant departments concerned. Petition disposed off.

Summary

Issues involved:
The issues involved in the judgment are related to the relief sought by the petitioner for additional tax liability on government contracts in the pre-GST and post-GST regime, incorporation of GST in Bill of Quantities (BOQ), neutralizing the impact of additional tax burden, and updating the State Schedule of Rates (SOR) with applicable GST.

Relief sought for additional tax liability on government contracts:
The petitioner filed a writ petition seeking direction for the concerned authority to bear the additional tax liability for executing subsisting government contracts awarded before and after the introduction of GST without updating the Schedule of Rates (SOR) to include applicable GST in the Bill of Quantities (BOQ) for inviting bids.

Neutralizing the impact of additional tax burden:
The petitioner also prayed for relief to neutralize the impact of unforeseen additional tax burden on government contracts since the implementation of GST, especially for ongoing contracts awarded before the GST regime. The petitioner requested the update of the State SOR to include applicable GST instead of the inapplicable West Bengal VAT for future contracts.

Court's decision and direction:
The court disposed of the writ petition by allowing the petitioner to file a representation before the Additional Chief Secretary, Finance Department, Government of West Bengal within four weeks. The Additional Chief Secretary was directed to make a final decision within four months of receiving the representation after consulting with all relevant departments. The court emphasized that the decision should be made after giving the petitioner an opportunity to be heard and should be based on law, considering all relevant judgments of different High Courts.

Final remarks and order:
The court specified that no coercive action should be taken against the petitioner until the final decision is made by the Additional Chief Secretary. It was also mentioned that if the petitioner fails to submit the representation within the stipulated time, the order would not be enforceable. The writ petition was disposed of with the mentioned observations and directions.