Builders Association Of INDIA Through Its Chairman vs. State Of Jharkhand Through Its Chief Secretary

Facts

The petitioners, including the Builders Association of India and Excel Venture Construction (P) Ltd., filed a writ petition before the Jharkhand High Court. They sought directions for the respondents (State of Jharkhand and various departments) to bear the additional tax liability arising from government contracts. This liability stemmed from the introduction of GST on July 1, 2017, without updating the Schedule of Rates (SOR) and Bill of Quantities (BOQ) to incorporate applicable GST for ongoing contracts awarded before or after GST implementation. The petitioners also requested an update to the State SOR to include applicable GST in place of the previous JVAT.

Held

The Court did not enter into the merits of the case. It noted that the petitioners had already made representations to the respondent authorities, including the Secretary-cum-Commissioner, Department of Commercial Taxes, Government of Jharkhand, Ranchi, but no decision had been taken. Therefore, the Court granted the petitioners liberty to file a fresh representation on the present issue before the Principal Secretary, Department of Commercial Taxes, Government of Jharkhand, Ranchi. Upon receipt of this representation, the said respondent was directed to provide an opportunity of hearing to the petitioners' representative and take an appropriate informed decision within a period of four months from the date of filing the representation. The writ petition was disposed of with these directions.

Key Issues

1. Whether the State respondents are liable to bear the additional tax burden on government contracts due to the introduction of GST, where the Schedule of Rates (SOR) and Bill of Quantities (BOQ) were not updated to reflect applicable GST for subsisting contracts awarded prior to or after the GST regime? The petitioners argued that the unforeseen additional tax burden resulting from GST implementation should be borne by the State. They contended that contracts awarded before July 1, 2017, which continued post-GST, and contracts awarded post-GST without updated rates, have led to an additional financial strain on contractors. They sought directions to neutralize this impact and update the State SOR to include applicable GST in lieu of JVAT. The respondents did not present any specific arguments as the matter was disposed of at an early stage.