Sreema Construction vs. State Of West Bengal And Ors.
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The petitioner, Sreema Construction, a proprietorship firm, sought reimbursement of Rs. 81,69,660.46 paid as Goods and Service Tax (GST). The petitioner was awarded a contract by the Superintending Engineer, Western Circle No-II, Public Works (Roads) Directorate, for widening and strengthening a road in Hooghly district. The tender was floated before the implementation of the GST Act, 2017. The petitioner quoted a rate of 16.17% less than the estimated amount. The work order was issued on February 08, 2018, for Rs. 9,84,79,035/-, and the project was completed on March 17, 2020. The petitioner calculated the GST payable on the executed work and deposited Rs. 1,13,46,750.64, subsequently claiming reimbursement of Rs. 81,69,660.46. The State respondents refused to reimburse the GST amount, leading the petitioner to file a writ petition after a failed mediation attempt.
Held
The Court did not delve into the merits of the writ petition. Instead, it disposed of the petition by directing the respondent authorities to treat the petitioner's demand letter dated March 14, 2022, as a representation. The respondents were ordered to pass a speaking order on this representation within a period of eight weeks from the date of communication of the order. Crucially, the respondents were directed to consider all relevant notifications issued by the Government of India, specifically the circular dated June 06, 2018, issued by the National Rural Infrastructure Development Agency, while deciding the petitioner's claim. The Court explicitly stated that it had not gone into the merits of the case.
Key Issues
1. Whether the petitioner is entitled to reimbursement of the additional GST amount paid, considering the contract was entered into before the implementation of the GST Act, 2017, and the rate was quoted based on prevailing taxes? (Question of law) The petitioner argued that at the time of tender and project commencement, the GST Act was not in force, and the quoted rate considered existing statutory taxes. They contended that the respondent authorities, as service recipients, are liable to bear the GST charges. The petitioner relied on a circular dated June 06, 2018, issued by the National Rural Infrastructure Development Agency (NRIDA) under the Ministry of Rural Development, Government of India, for reimbursement. The petitioner sought their demand letter dated March 14, 2022, to be treated as a representation and decided within a time-bound manner in light of this circular. The respondents stated they were ready to consider the petitioner's demand letter as a representation and pass a speaking order within eight weeks, taking into account relevant notifications, including the NRIDA circular.
Sections Cited
Goods and Service Tax Act, 2017
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2024 Sl. No.
D/L. Mithun Ct.No.
WPA 13277 of 2023
Sreema Construction Vs. The State of West Bengal & Ors.
Mr. Subhabrata Datta, Mr. Debashis Sarkar, Mr. Ajeyo Chowdhury, …for the petitioner. Mr. Susanta Pal, Ms. Susnita Saha …for the State respondents.
In the present writ petition, the petitioner is seeking direction against the Respondent No.3 for the reimbursement of the additional amount paid by them towards the Goods & Service tax amounting to Rs. 81,69,660.46/-. Learned counsel for the petitioner submits that the petitioner is a proprietorship firm carrying on business in the realm of constructional activities undertaken by the Government of West Bengal, Government of India and other government undertaking organizations. The respondent No. 3 floated a Notice Inviting E- Tender being No. WBPWD/PW(R)/SEPD/PIU-1/NIT- No- 22 of 2017- 18/Sl No-1 (2nd call), of Superintending Engineer, Western Circle No-II, Public Works (Roads) Directorate
2 for widening and strengthening of Baidyabati- Tarakeswar-Champadanga Road from 0.00 Km. to 1.20 Km. and surfacing works from the Chainage 1.20 Km. to 10.00 Km. (S.H-2) under Hooghly Construction Division, Public Works Department, in the district of Hooghly. The petitioner further contended that the petitioner participated in the said Notice Inviting E- Tender process and quoted a rate @ 16.17% less than the estimated amount put to tender. Having been qualified in the technical bid, the rate quoted by the petitioner was duly considered and found to be lowest. Considering the lowest rate in the process of comparative bidding, a work order being memo no. 263 dated February 08, 2018 was issued in favour of the petitioner instructing him to commence the work on and from February 09, 2018. According to the work order the scheduled date of completion was November 08, 2018 and tendered amount was Rs. 9,84,79,035/-. Consequently, a contract was executed between the State of West Bengal and the petitioner. Pursuant to the said instruction as mentioned in the work order, the execution of the subject work was commenced and without there being any interruption, the said subject project has been completed satisfactorily on March 17, 2020. The payment has been made on the basis of the
3 executed quantity of the work. The Goods and Service Tax Act, 2017 was implemented with effect from July 01, 2017. At the time of floating the Notice Inviting Tender or at the time of commencement of the subject project, the existence of the Goods and Service Tax Act, 2017 was not there and the petitioner quoted the rate considering the statutory changes, taxes prevailing at the relevant point of time. The petitioner further contended that the gross bill value as per the payment certificate issued by the appropriate authority for the subject project was of Rs. 10,59,03,006/-. Taxable value as per Goods and Service tax is of Rs. 9,45,56,255.36/- (Rs. 10,59,03,006 x 100/112). After receiving the final bill, the petitioner had to deposit a sum of Rs. 1,13,46,750.64/- (Rs. 9,45,56,255.36 x 12/100) on account of Goods and Service Tax. Thereafter, the total deposited amount on account of Goods and Services Tax is a sum of Rs. 81,69,660.46/- [Rs. 1,13,46,750.64- (Rs. 10,59,03,006 x 3/100)]. It is the case of the petitioner that the payment has been made on the basis of the executed quantity of the subject work. The petitioner is entitled for the reimbursement of a sum of Rs. 81,69,660.46/- on account of Goods and Service Tax for the said project.
4 The respondent authorities herein are the service recipient and as such they are entitled to bear the charges on account of the Goods and Service Tax. Despite being fully aware of the aforesaid scenario and the intention of the parties at the time of entering the contract, the State of West Bengal is, at present, refused to reimburse the Goods and Service Tax amount which has already been paid by the petitioner. Further the petitioner states that for settlement of the said dispute, the petitioner filed an application dated July 8, 2022 before the State Legal Services Authority, West Bengal seeking to reimburse the Goods and Service Tax amount which was already paid by the petitioner in respect of the said project. After filing the said application, the respondents were notified to attend the mediation. The said mediation failed as the respondents expressed their unwillingness to participate in the above-mentioned mediation process and further prayed to drop the proceeding of the mediation process. Hence, being aggrieved by the non-payment of the GST amount, the petitioner has preferred the instant writ petition. Learned counsel for the petitioner states that he has made a demand before the appropriate authority vide letter dated 14.03.2022. The petitioner further
5 contended that he is entitled to refund of his GST amount in terms of the circular dated 06.06.2018 issued by the National Rural Infrastructure Development Agency under the Ministry of Rural Development, Government of India. Learned counsel for the petitioner further states that the petitioner shall be satisfied at this stage if its demand letter dated 14.03.2022 is treated as a representation by the authority and a decision is taken on the same within a time bound manner in the light of the circular issued by the Ministry dated 06.06.2018. Learned counsel for the respondents appears and states that they are ready and willing to consider the petitioner’s demand letter dated 14.03.2022 as representation in a time bound manner and will pass a speaking order after affording an opportunity of hearing to the petitioner within a period of eight weeks from the date of communication of this order. Needless to mention that the respondents shall take into consideration all the relevant notifications issued by the Government of India, specifically, the notification dated 06.06.2018 issued by National Rural Infrastructure Development Agency under the Ministry of Rural Development, Government of India while
6 considering the demand letter/representation of the petitioner dated 14.03.2022. With the above direction, the present writ petition is disposed of. It goes without any saying that this Court has not gone into the merit of the present writ petition. Since no affidavit is called for, allegation levelled in the writ petition are deemed not to have been admitted.
(Gaurang Kanth, J.)
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.