A Single bench of Justice Md. Nizamuddin of Calcutta High Court directed the West Bengal Government to take necessary steps to pay the extra liability for the execution of ongoing government contracts given under either Pre or Post Goods and Services Tax (GST) regime.
The writ petition has been submitted with the aim of seeking a directive from the relevant authorities to take responsibility for the extra tax burden linked to the fulfilment of ongoing government contracts, whether these contracts were granted prior to the implementation of the GST system or afterward. This includes cases where the Schedule of Rates (SOR) has not been revised to account for the applicable GST while formulating the Bill of Quantities (BOQ) for the purpose of soliciting bids.
The petitioner has additionally requested that the respondents’ relevant authority be instructed to counteract the unanticipated and increased tax load on government contracts that has arisen since the initiation of GST from July 1, 2017. This applies to contracts that were already underway prior to this date. The petitioner seeks to have the State Schedule of Rates (SOR) revised to include the relevant GST instead of the previously irrelevant West Bengal Value Added Tax (VAT).
Considering the submissions of the parties, the bench has given the liberty to the petitioner to file appropriate representation regarding the claims put forth before the High Court before the Additional Chief Secretary Finance Department, Government of West Bengal within four weeks from date.
Further, 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.
The bench also mentioned that the decision taken by the Additional Chief Secretary shall be considered as final decision if it has been taken after giving the opportunity of hearing to the petitioner or his authorized representatives.
It was also instructed that till the final decision is taken by the Additional Chief Secretary, no coercive action shall be taken against the petitioner. However, in any case of default in making representation by the petitioner within the time stipulated herein this order will not have any force.
The High Court 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 judgements of different High Courts upon which petitioners intend to rely.
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