Case Law Details
Hriday Kumar Das Vs State of West Bengal & Ors. (Calcutta High Court)
In a recent judgment by the Calcutta High Court, a writ petition filed by Hriday Kumar Das against the State of West Bengal and others has been considered. The petition revolves around the issue of additional tax liability for executing existing government contracts, both pre-GST and post-GST, without updating the Schedule of Rates (SOR) to incorporate applicable GST. The petitioner seeks relief in neutralizing the unforeseen tax burden on government contracts and updating the State SOR to include GST where West Bengal VAT is no longer applicable.
Key Points of the Judgment:
1. Representation Allowed: The court disposed of the writ petition, granting the petitioner the liberty to file a representation before the Additional Chief Secretary, Finance Department, Government of West Bengal, within four weeks. This representation should address the concerns raised in the petition, particularly related to additional tax liabilities and updating the State SOR.
2. Time Frame for Decision: The Additional Chief Secretary, Finance Department, is required to make a final decision within four months from the date of receiving the representation. The decision should be reached after consultation with all relevant departments.
3. No Coercive Action: During the period when the representation is under consideration, no coercive action shall be taken against the petitioner. This ensures that the petitioner will not face any punitive measures while the matter is being reviewed.
4. Default in Representation: In case the petitioner fails to submit the representation within the stipulated time frame, the court’s order will lose its validity.
5. Consideration of Law and Precedent: The court emphasized that the Additional Chief Secretary must consider the representation in accordance with the law and take into account all relevant judgments from different High Courts that the petitioner may rely upon.
6. Challenging Impugned Order: The petitioner had also challenged an order dated May 31, 2023, passed by the appellate authority under the West Bengal Goods and Services Tax (WBGST) Act. Although such orders are typically appealable before a tribunal, given the absence of this forum, the High Court entertained the writ petition.
7. Affidavits and Replies: The respondents were directed to file affidavits in opposition to the petition within four weeks, with the petitioner having the opportunity to file a reply within two weeks thereafter.
8. Temporary Relief: To prevent coercive recovery actions, the petitioner was asked to deposit an additional 20% of the disputed tax amount within ten days from the judgment date. Failure to comply with this deposit would render the interim order ineffective.
9. Scheduled for Final Hearing: The case was scheduled for a final hearing in the monthly list of December 2023. During this hearing, both parties are expected to present their arguments concisely in written notes.
Conclusion:
The Calcutta High Court’s judgment in the case of Hriday Kumar Das Vs State of West Bengal addresses important issues related to GST tax liability on government contracts. While the court has allowed the petitioner to file a representation for review, it has also ensured that the representation process is completed within a reasonable time frame. The judgment also provides temporary relief by preventing coercive recovery actions, subject to the petitioner’s deposit of an additional 20% of the disputed tax amount. The final hearing scheduled for December 2023 will be crucial in determining the outcome of this case.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
Affidavit-of-service filed in court be kept with the record.
Heard learned Counsel appearing for the parties.
This writ petition has been filed for the relief by way of direction upon the respondents authority concerned to bear the additional tax liability for execution of subsisting Government contracts either awarded in the pre-GST regime or in the post GST regime without updating the Schedule of Rates (SOR) incorporating the applicable GST while preparing Bill of Quantities (BOQ) for inviting the bids. The petitioner has also prayed for relief of issuance of direction upon the respondents authority concerned to neutralize the impact of unforeseen additional tax burden on Government contracts since the introduction of GST w.e.f. 1st July, 2017 for ongoing contract awarded before the said date and to update the State SOR incorporating applicable GST in lieu of inapplicable West Bengal VAT henceforth.
Considering the submissions of the parties this writ petition is disposed of by giving liberty to the petitioner to file appropriate representation in the aforesaid regard as referred in preceding paragraph of this order, before the Additional Chief Secretary, Finance Department, Government of West Bengal within four weeks from date. 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.
Needless to mention that such representation shall be considered and final decision will be taken up by the Additional Secretary, after giving opportunity of hearing to the petitioner or his authorized representatives. Till the final decision is taken by the Additional Chief Secretary, no coercive action shall be taken against the petitioner. In case of default in making representation within the time stipulated herein this order will not have any force.
It is 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.
By this writ petition petitioner has also challenged the impugned order dated 31st May, 2023 passed by the appellate authority concerned under the WBGST Act. Though the aforesaid impugned order is appealable order under the statute before the Tribunal but since the said forum is not available at present this writ petition is being entertained and I am of the view that the issues involved in this writ petition cannot be adjudicated without calling for affidavits from the respondents.
Let the respondents file affidavit-in-opposition within four weeks, petitioner to file reply thereto, if any, within two weeks thereafter.
There shall be no coercive steps for recovery of the demand in question arising out of the impugned order of the appellate authority concerned if petitioner deposits further 20% of the disputed amount of tax within a period of ten days from date.
In case of failure on the part of the petitioner to make the aforesaid deposit within the time stipulated herein this interim order shall not have any force and the respondent authority concerned will be free to proceed in accordance with law.
List this matter for final hearing in the monthly list of December, 2023.
At the time of hearing, parties should be ready with the short written notes of arguments.
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