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2023 (10) TMI 1152 - HC - GSTLevy of GST - works contract executed and completed after 1st July, 2017 wherein the contracts were awarded in the pre-GST regime or post-GST regime - HELD THAT - It appears the respondent authorities concerned have to bear the additional tax liability for execution of subsisting Government contract either awarded to the petitioner during pre-GST regime or in post-GST regime without updating the Schedule of Rates (SOR) incorporating the applicable GST while preparing Bill for payment. Considering the submissions of the parties, this writ petition is disposed of by giving liberty to the petitioner to file appropriate representations stating all the facts and provision as referred in preceding paragraph of this judgment, before the Additional Chief Secretary, Finance Department, Government of West Bengal within four weeks from date. On receipt of such representations the Additional Chief Secretary, Finance Department shall take a final decision within four months from the date of receipt of such representations after consulting with all other relevant departments concerned. Petition disposed off.
Issues Involved:
The issues involved in the judgment are liability of GST on works contract executed before and after GST regime, challenge to show cause notice under GST Act, contention regarding payment of GST tax by Government contractee, and liability of petitioners to pay tax and interest under Section 73 of the GST Act. Liability of GST on Works Contract: The petitioners filed a writ petition seeking direction for the respondent to pay the GST liability incurred on works contracts executed before and after 1st July, 2017. They argued that it was impractical to include GST in the contract value awarded prior to the GST legislation. The petitioners received work orders during the pre-GST and post-GST regime and started work in both periods. They received payment certificates without payment of GST as per the notification and statute. Challenge to Show Cause Notice: The petitioners challenged the summary of the show cause notice issued under Section 73 of the GST Act for the financial year 2017-18. They contended that the notice was improper as it was issued without a proper show cause notice under the GST Act. The petitioners submitted a reply clarifying all points and requested the respondent not to take coercive action without disposing of the submission. Contention Regarding Payment of GST Tax: The petitioners submitted letters to the Government contractee requesting payment of GST tax with interest as applicable under the GST Act. They argued that the Government contractee cannot avoid paying the applicable tax and interest as per the notification issued by the Finance Department. Despite several representations, the concerned respondent did not consider the request for payment of tax and interest. Liability of Petitioners under Section 73 of GST Act: The respondents argued that the petitioners, being registered under the GST Act, are liable to pay the tax and interest as per Section 73 of the GST Act. They contended that the writ petition had no merit and should be dismissed unless a similar order as passed earlier by the Court is considered for the interest of justice. Decision and Directions: The Court disposed of the writ petition by allowing the petitioners to file representations 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 after consulting with relevant departments. No coercive action was to be taken against the petitioners until a final decision is made. The Additional Chief Secretary was instructed to pass a reasoned order considering all relevant judgments cited by the petitioners. Conclusion: The writ petition was disposed of with no order as to costs, and urgent certified copies of the judgment were to be provided to the respective advocates. All parties were required to act on the server copy of the order downloaded from the official website of the Court.
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