Case Law Details
Biswajit Biswas Vs Assistant Commissioner Of Revenue Bureau Of Investigation (BOI) And ORS (Calcutta High Court)
Introduction: The Calcutta High Court recently issued an order in the case of Biswajit Biswas vs. Assistant Commissioner of Revenue, Bureau of Investigation (BOI), and others, pertaining to a dispute related to the Goods and Services Tax (GST). This article provides an overview of the case, the court’s decision, and the implications of the order.
Background of the Case: The dispute in question arises from a contract executed by the petitioner, Biswajit Biswas, for the West Bengal State Rural Development Agency (WBSRDA), which is a State Government undertaking. The central issue revolves around whether the contract between the petitioner and WBSRDA required the payment of GST (Goods and Services Tax).
The petitioner contends that the contract did not include provisions for GST payment and that the imposition of such a claim is unjust and lacks legal authority. According to the petitioner, as WBSRDA has not made any GST payment, there is no basis for the petitioner to be held liable for paying the demanded GST amount. To support this argument, the petitioner refers to a Notification dated June 6, 2018, issued by the National Rural Infrastructure Development Agencies. The notification provides guidelines for handling GST in contracts, including the deduction of the value of subsumed taxes from the original contract price to determine the actual project cost. It also stipulates that the entire GST on the supply should be borne by the employer (WBSRDA, in this case).
However, the respondent authorities claim that despite the notification, no supplemental agreement had been entered into between the petitioner and WBSRDA. They argue that whether the petitioner should be held liable for GST dues in the absence of payment by WBSRDA is a matter to be adjudicated by the Appellate Authority.
Court’s Decision and Implications: The Calcutta High Court’s decision, as of the most recent order dated September 18, 2023, has rendered the writ petition filed by the petitioner as infructuous. The court notes that subsequent events have transpired after the petition was filed, and, more importantly, a final order has been issued on September 18, 2023.
The court directs that the petitioner has an efficacious statutory remedy available against the order dated September 18, 2023, in the form of a statutory appeal. It is emphasized that the court has not made any adjudication on the merits of the case, and all questions are to be decided by the Appellate Authority.
In essence, the Calcutta High Court’s order signifies that the petitioner’s challenge to the imposition of GST in the contract dispute should be addressed through the statutory appeal process. The court has not made a determination on the substance of the dispute but has provided the petitioner with a path to seek resolution through the statutory framework.
Conclusion: The recent order by the Calcutta High Court in the case of Biswajit Biswas vs. Assistant Commissioner of Revenue BOI and others underscores the significance of following the established statutory appeal process in matters involving GST disputes. While the court has not ruled on the substantive issues of the case, it has directed the petitioner to pursue their remedy through the appropriate legal channels. This order serves as a reminder of the importance of adhering to the prescribed legal procedures for addressing taxation matters.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
It is submitted on behalf of the respondent Authorities that during the pendency of the writ petition, a final order has been passed on 18 September, 2023 under Section 73(5) read with Section 74(5) of the WBGST Act, 2017 and the relevant Rules framed thereunder. A copy of such order is also supplied to the petitioner.
The challenge in this writ petition pertains to a contract executed by the petitioner for the WBSRDA, a State Government undertaking.
It is submitted on behalf of the petitioner that the underlying contract by and between the petitioner and the WBSRDA did not provide for payment of any GST. Such claim has been unilaterally imposed on the petitioner unconscionably and without authority of law. In the absence of the WBSRDA having made any payment, there is no question of the petitioner being permitted to pay the demand of GST. In this connection, the petitioner relies on a Notification dated 6 June, 2018 issued by the National Rural Infrastructure Development Agencies, inter alia, providing as follows;
viii. Once the value of work sanction and GST taxes are arrived, the employer may enter into supplemental agreement with revised agreement value that will be original contracted value minus the value of subsumed tax arrived as above plus GST of 12% i.e., the cost of the subsumed taxes factored in the original contract value is required to be deducted from the original contract price to arrive at the actual amount of “cost of the project”.
xi. The contractor while raising their bill and tax invoice post-GST, will now collect GST as indicated above from the employer and will remit the same to the respective Government. The entire GST of the supply will have to be finality borne by the employer.
It is submitted on behalf of the respondent authorities that despite the aforesaid Notification, no supplemental agreement had been entered into by and between the petitioner and the WBSRDA. The fact that any claim which could be sought on account of GST dues from the petitioner in the absence of the WBSRDA is a question which is to be adjudicated by the Appellate Authority.
In this background, the petitioner contends that without any corresponding payment by the WBSRDA, there is no question of the petitioner being asked to pay GST dues.
In view of the subsequent events which have transpired after the filing of the writ petition and more particularly in view of the final order dated 18 September, 2023, the instant writ petition has become infructuous.
The petitioner has an efficacious statutory remedy against the order dated 18 September, 2023 by way of preferring a statutory appeal.
It is made clear that there is no adjudication on the merits of the case and all questions are left to be decided by the Appellate Authority.
With the aforesaid direction, WPA/751/2023 stands disposed of.
Mr. Ghosh has been requested to appear for the respondent authorities. The services of Mr. Ghosh be regularized by the Appropriate Authority.
