Raa Contractors And Builders PVT. LTD. vs. State Of West Bengal And Ors.

Facts

Raa Contractors & Builders Private Limited (the petitioner) filed a writ petition challenging the non-payment of the GST component of bills raised for work done under a contract awarded on September 5, 2017. The petitioner claimed an amount of Rs. 14,48,633/-. The respondent authorities contended that the work was done in the pre-GST era, making them not liable for the GST component. They also relied on a Schedule of Rates effective from November 1, 2017, which they argued was exclusive of GST. The maintainability of the writ petition was also challenged by the respondents.

Held

The Court held that the writ petition was maintainable. It reasoned that public authorities have a higher standard of fairness and that the case involved an ingredient of public law, as the contract was for discharging a public duty by the West Bengal State Electricity Distribution Company Limited. Regarding the GST component, the Court found that the contract dated September 5, 2017, clearly fell within the post-GST era, as per the notification dated August 16, 2017, which delineated the pre and post-GST eras with a cut-off date of July 1, 2017. The reliance on the Schedule of Rates was deemed misplaced, as it merely indicated that GST was not included in the rates but did not fix liability. The Court affirmed that as per law, the liability to pay GST is initially on the petitioner-contractor, recoverable from the employer. Therefore, the petitioner, having paid the GST component, was entitled to reimbursement. The unreported judgment cited by the respondents was found unhelpful as it laid down no specific ratio or proposition of law. The Court directed the respondent authorities to disburse the entire dues of the petitioner, including the GST paid, by November 17, 2023.

Key Issues

1. Whether the writ petition is maintainable against public authorities for a contractual dispute involving public interest and public duty, as per Article 226 of the Constitution of India? 2. Whether the petitioner is entitled to reimbursement of the GST component for work done under a contract awarded on September 5, 2017, which falls within the post-GST era? Petitioner's Arguments: The petitioner argued that the writ petition is maintainable because public interest is involved and public authorities cannot avoid judicial scrutiny, citing Unitech Limited. They asserted that the contract was awarded in the post-GST era and that they had paid the GST component, which is recoverable from the employer as per law and the relevant notification. Revenue/State's Arguments: The respondents contended that the work was of the pre-GST era and thus they were not liable for the GST component. They relied on a Schedule of Rates effective November 1, 2017, stating it was exclusive of GST, implying the rates did not include GST. They also cited an unreported co-ordinate bench judgment.