2024 (3) TMI 1212 - HC - GST

Petition for the relief - 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) incorporating the applicable GST while preparing Bill of Quantities (BOQ) for inviting the bids - HELD THAT - Petitioner has also prayed for relief of 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 before the said date and to update the State SOR incorporating applicable GST in lieu of inapplicable West Bengal VAT henceforth. Considering the submissions of the parties this writ petition is disposed of by giving liberty to the petitioner to file appropriate representation in the aforesaid regard as referred in preceding of this order, before the Additional Chief Secretary, Finance Department, Government of West Bengal within four weeks from date. It is also recorded that the Additional Chief Secretary, while taking decision on the representation to be filed by the petitioner shall act in accordance with law and pass a reasoned and speaking order on merit and after considering all the judgments of different High Courts upon which petitioners intend to rely. With this observation and direction this writ petition being WPA is disposed of.

Summary

Issues involved:
The issues involved in the judgment are the liability of additional tax burden for government contracts awarded before and after the introduction of GST, the incorporation of applicable GST in the Schedule of Rates (SOR) for inviting bids, and the impact of unforeseen tax burden on ongoing contracts.

Liability of additional tax burden for government contracts:
The writ petition sought direction for the authority concerned to bear the additional tax liability for executing government contracts awarded before and after the GST regime without updating the Schedule of Rates (SOR) to include applicable GST in the Bill of Quantities (BOQ) for inviting bids.

Incorporation of applicable GST in SOR for inviting bids:
The petitioner requested relief for updating the State Schedule of Rates (SOR) to include applicable GST instead of the inapplicable West Bengal VAT for future government contracts. The judgment allowed the petitioner to file a representation before the Additional Chief Secretary, Finance Department, Government of West Bengal within four weeks.

Impact of unforeseen tax burden on ongoing contracts:
The judgment directed the Additional Chief Secretary to make a final decision within four months of receiving the petitioner's representation after consulting with relevant departments. The decision was to be based on the law, considering all relevant judgments of different High Courts that the petitioner intends to rely on. The petitioner was granted the opportunity to be heard before the final decision is made, and no coercive action was to be taken against the petitioner until the decision is finalized. Failure to make the representation within the stipulated time would render the order ineffective. The writ petition was disposed of with these observations and directions.