Benay Bhusan Palit Memorial Education Society vs. The State Of West Bengal And Ors.

Facts

The petitioner, Benay Bhusan Palit Memorial Education Society, filed a writ petition seeking directions for the respondents to bear additional tax liability arising from government contracts. These contracts were either awarded before or after the GST regime but were executed without updating the Schedule of Rates (SOR) to incorporate applicable GST in the Bill of Quantities (BOQ). The petitioner also sought to neutralize the impact of unforeseen additional tax burdens on ongoing contracts awarded before July 1, 2017, and to update the State SOR to include applicable GST instead of West Bengal VAT. Additionally, the petitioner challenged an order dated September 1, 2022, from the appellate authority, which rejected their appeal on the ground of a four-day delay.

Held

The Court disposed of the writ petition by granting the petitioner liberty to file representations before the Additional Chief Secretary, Finance Department, Government of West Bengal, within four weeks. The Additional Chief Secretary is directed to take a final decision within four months of receiving the representation, after consulting relevant departments and providing the petitioner an opportunity of hearing. No coercive action shall be taken against the petitioner until the final decision. The Court also set aside the appellate authority's order dated September 1, 2022, which had dismissed the petitioner's appeal on a technical ground of a four-day delay. The matter was remanded back to the appellate authority to consider and dispose of the appeal on its merits within twelve weeks, after giving the petitioner an opportunity of hearing. The Additional Chief Secretary is to act in accordance with law and pass a reasoned order, considering relevant judgments.

Key Issues

1. Whether the respondents are liable to bear the additional tax liability for government contracts awarded in the pre-GST or post-GST regime where the SOR was not updated to include applicable GST in the BOQ, and whether the impact of unforeseen additional tax burden on ongoing contracts awarded before July 1, 2017, should be neutralized by updating the State SOR. Petitioner's contention: The petitioner argued that the introduction of GST has created an unforeseen additional tax burden on government contracts, particularly for those awarded before July 1, 2017, where the contract rates did not account for GST. They sought a direction for the authorities to bear this additional liability and update the SOR. The petitioner also challenged the appellate authority's order rejecting their appeal on a technical ground of limitation. Revenue/State's contention: The judgment does not record any specific arguments made by the State or its authorities regarding the petitioner's primary prayer concerning the additional tax liability. However, regarding the rejected appeal, the State was represented, and the court considered the matter.