Pinki Construction & Anr. Vs Executive Engineer & Head of PIU WBSRDA (Calcutta High Court)
Calcutta High Court has directed the West Bengal State Rural Development Agency (WBSRDA) to re-evaluate its decision regarding the Goods and Services Tax (GST) reimbursement sought by M/s Pinki Construction & Anr. for works contract services. The petitioner, a partnership firm registered under the CGST Act and WBGST Act, had sought a mandamus to compel the respondents to remit GST amounts paid on services rendered from July 1, 2017, onwards. The core of the dispute revolved around the interpretation and application of Notification No. 5050-F(Y) dated August 16, 2017, specifically concerning whether Paragraph 3(iv), which pertains to pre-GST contracts, was being erroneously applied to deny reimbursement for contracts executed after the GST implementation date.
Pinki Construction argued that the respondents had misapprehended the notification’s scope. They contended that Paragraph 3(iv) is strictly confined to contracts entered into before the GST regime commenced, whereas Paragraph 4 of the very same notification explicitly governs “post-GST contracts or ongoing project where estimates have been approved before 1st of July 2017.” According to the petitioner, for such contracts, GST rates are applicable, and the suppliers are obligated to pay WBGST and CGST on all taxable goods and services. Therefore, the firm asserted that the denial of GST reimbursement was arbitrary, unreasonable, and discriminatory, violating Article 14 of the Constitution. To bolster its argument, the petitioner cited the Calcutta High Court’s judgment in Sushil Kumar Thard v. National Jute Manufactures Corporation Limited. & Ors. (subsequently affirmed by the Supreme Court), which established that even in contractual matters, state instrumentalities are bound to act fairly, reasonably, and non-arbitrarily. The State’s counsel did not contradict these submissions during the proceedings.
