M/S Hindusthan Uban Infrastructure Limited vs. State Of West Bengal And Ors.

Facts

The petitioner, M/s. Hindusthan Urban Infrastructure Limited, filed a writ petition before the High Court of Calcutta. The petition challenged the practice of government authorities awarding contracts, both pre- and post-GST, without updating the Schedule of Rates (SOR) and Bill of Quantities (BOQ) to incorporate applicable Goods and Services Tax (GST). This resulted in an unforeseen additional tax burden on the petitioner for ongoing contracts awarded before July 1, 2017, and for new contracts where the SOR did not reflect GST. The petitioner sought directions for the respondents to bear this additional tax liability and to update the State SOR to include applicable GST in lieu of West Bengal VAT.

Held

The High Court disposed of the writ petition by granting liberty to the petitioner to file an appropriate representation before the Additional Chief Secretary, Finance Department, Government of West Bengal. The Court directed the Additional Chief Secretary to take a final decision on the representation within four months of its receipt, after consulting relevant departments and providing the petitioner an opportunity of hearing. The Court emphasized that the decision must be reasoned, speaking, and in accordance with law, considering any judgments the petitioner intends to rely upon. Until a final decision is taken, no coercive action shall be taken against the petitioner. The Court did not decide the merits of the petitioner's claims regarding the additional tax liability or the updating of the SOR.

Key Issues

1. Whether the Court should direct the respondents to bear the additional tax liability arising from government contracts awarded without updating the Schedule of Rates (SOR) and Bill of Quantities (BOQ) to include applicable GST, particularly for contracts awarded before the introduction of GST on July 1, 2017. The petitioner argued that the failure to update the SOR and BOQ led to an unforeseen additional tax burden, which should be borne by the State. The State's arguments were not explicitly recorded in the judgment. 2. Whether the Court should direct the State to update its SOR to incorporate applicable GST in lieu of West Bengal VAT for future government contracts. The petitioner contended that this update is necessary to neutralize the impact of the additional tax burden on government contracts.