Facts of the Case

Abdur Rouf Khan filed this writ petition before the Calcutta High Court seeking a direction upon the respondent authorities to bear the additional GST liability for execution of subsisting Government works contracts, awarded either in the pre-GST regime or the post-GST regime, without the Schedule of Rates (SOR) having been updated to incorporate applicable GST while preparing the Bill of Quantities (BOQ) for inviting bids. The petitioner also sought a direction to neutralise the unforeseen additional tax burden on Government contracts since the introduction of GST with effect from 1 July 2017, and to update the State SOR to incorporate applicable GST in place of the inapplicable West Bengal VAT for future contracts.

Issues Involved

  1. Whether the State is obligated to bear or neutralise the additional GST burden on Government works contracts awarded without the Schedule of Rates and Bill of Quantities being updated to reflect GST.
  2. Whether such a policy-natured grievance should be adjudicated directly by the writ court or routed to the competent executive authority through a representation.

Petitioner's Arguments

  • Government contracts, both pre-GST and post-GST, continue to be governed by a Schedule of Rates that has not been updated to incorporate applicable GST in place of the erstwhile West Bengal VAT, causing an unforeseen additional tax burden on contractors like the petitioner.
  • Sought a direction compelling the State to bear or neutralise this additional tax liability and to update the SOR going forward to reflect GST.

Respondent's Arguments

  • No independent counter-submissions are separately recorded beyond the appearance of the learned Government Pleader and standing counsel for the State.
  • The State did not contest the grievance on merits before the writ court, consistent with routing it through the administrative representation process instead.

Court Order/Findings

  • Rather than adjudicating the SOR/GST-neutralisation question itself, the Court disposed of the petition by granting liberty to the petitioner to file a representation before the Additional Chief Secretary, Finance Department, Government of West Bengal, within four weeks.
  • The Additional Chief Secretary was directed to take a final decision within four months of receipt of the representation, after consulting all relevant departments and giving the petitioner a hearing, by way of a reasoned and speaking order.
  • The authority was specifically directed to consider all judgments of different High Courts on which the petitioner intends to rely.
  • Till the final decision is taken, no coercive action is to be taken against the petitioner; failure by the petitioner to file the representation within the stipulated time renders the order inoperative.

Important Clarification

  • Grievances about non-updation of the Schedule of Rates to reflect GST on Government works contracts are being routed by the Calcutta High Court to the Finance Department for a reasoned decision, rather than being decided directly in writ jurisdiction — a recurring template in West Bengal GST-on-government-contracts litigation.
  • The protective direction — no coercive action pending the decision — is a practical interim safeguard contractors can seek when raising similar SOR/GST-neutralisation claims.
  • The representation route obliges the authority to consider comparable High Court judgments cited by the contractor and to pass a speaking order, giving the contractor a real opportunity rather than a mere formality.
  • The order builds in a self-executing safeguard against inaction on both sides: the petitioner loses the benefit of the order if the representation is not filed within four weeks, while the authority is bound to a four-month outer limit for its decision.
  • Contractors with subsisting Government works contracts predating or spanning the GST rollout on 1 July 2017 have a template here for seeking administrative neutralisation of the additional tax burden, rather than pursuing this purely as a rate-fixation dispute in a civil suit.

Sections Involved

  • Section 9, WBGST/CGST Act, 2017 – levy and collection of GST, the source of the additional tax burden on works contracts raised in this petition.
  • Article 226, Constitution of India – writ jurisdiction invoked before the Calcutta High Court.

Decision – In Favour of

Disposed of with directions, in part in favour of the Assessee. No finding was rendered on the merits of the SOR/GST-neutralisation claim, but the petitioner obtained a time-bound representation route with an interim protection against coercive action.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: Calcutta High Court
  • Case No.: WPA 26457 of 2023
  • CNR: Not available on record
  • Coram: Hon'ble Md. Nizamuddin, J.
  • Decision Date: 30.11.2023
  • Disposal Nature: Disposed of with liberty to file representation

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