Subimal Kumar Maji & Ors vs. State Of West Bengal & Ors

Held

The Court disposed of the writ petitions by granting liberty to the petitioners to file appropriate representations before the Additional Chief Secretary, Finance Department, Government of West Bengal, within four weeks. The Additional Chief Secretary was directed to take a final decision on these representations within four months of their receipt, after consulting all relevant departments. The decision-making process must include an opportunity of hearing for the petitioners. Until a final decision is rendered, no coercive action is to be taken against the petitioners. The Additional Chief Secretary is to act in accordance with law, pass a reasoned and speaking order on merit, and consider all judgments relied upon by the petitioners. The Court did not decide the substantive issues raised by the petitioners but provided a procedural mechanism for their resolution.

Facts

The petitioners, who are contractors executing Government contracts, filed multiple writ petitions. They sought directions for the respondent authorities to bear the additional tax liability arising from the execution of subsisting Government contracts. These contracts were either awarded before or after the introduction of GST on July 1, 2017, but without updating the Schedule of Rates (SOR) and Bill of Quantities (BOQ) to incorporate applicable GST. The petitioners also prayed for relief to neutralize the unforeseen additional tax burden on ongoing contracts awarded before GST and to update the State SOR to include applicable GST in lieu of the West Bengal VAT.

Key Issues

1. Whether the respondent authorities are liable to bear the additional tax liability for Government contracts awarded pre-GST or post-GST, where the SOR and BOQ were not updated to include GST? Petitioner's contention: The petitioners argued that the introduction of GST resulted in an unforeseen additional tax burden on existing and ongoing Government contracts. They contended that the authorities should bear this additional liability as the contract rates were fixed based on the pre-GST tax regime, and the SOR/BOQ were not updated to reflect the GST implications. They sought to neutralize the impact of this additional tax burden and update the State SOR to incorporate GST in place of VAT. Revenue/State's contention: The judgment does not record any specific arguments made by the revenue or State authorities.