Pinki Construction & Anr. Vs Executive Engineer (Calcutta High Court)
Calcutta High Court has instructed the Additional Chief Secretary, North Bengal Development Department, to re-examine a request for Goods and Services Tax (GST) reimbursement from Pinki Construction & Anr., a partnership firm registered under the CGST and WBGST Acts. The petitioner sought a mandamus for the payment of GST amounts on Works Contract Services rendered from July 1, 2017, onwards. Pinki Construction contended that the respondent authorities had incorrectly applied Paragraph 3(iv) of Notification No. 5050-F(Y) dated August 16, 2017, which, they argued, pertains exclusively to pre-GST contracts. The firm maintained that contracts executed after July 1, 2017, fall under Paragraph 4 of the same notification, which explicitly states that GST rates would be applicable. The petitioner asserted that the denial of reimbursement was arbitrary, unreasonable, and discriminatory, thereby infringing upon Article 14 of the Constitution of India, which mandates equality before the law and equal protection of laws.
During the proceedings, the petitioner’s counsel cited the Calcutta High Court’s judgment in Sushil Kumar Thard v. National Jute Manufactures Corporation Limited. & Ors. (WPA 4751 of 2023), subsequently affirmed by the Supreme Court in National Jute Manufactures Corporation Limited v. Sushil Kumar Thard SLP(C) 25436 of 2023. This judicial precedent reinforces that even in contractual matters, the State and its instrumentalities are bound by principles of fairness, reasonableness, and non-arbitrariness. The State’s counsel was unable to present a contradictory argument to the petitioner’s submissions. The High Court, after reviewing the available records, concluded that the respondent authority had indeed misinterpreted the notification. It noted that Paragraph 3(iv) is strictly limited to pre-GST contracts, and therefore, could not be used to deny reimbursement for contracts performed after July 1, 2017, which are clearly governed by Paragraph 4.
