Facts of the Case

Prodyut Kumar Roy, a government works contractor, filed Writ Petition (WPA 22019 of 2023) before the Calcutta High Court against the State of West Bengal and Raiganj Municipality, seeking a direction that the authorities bear the additional tax liability arising from execution of subsisting government contracts — whether awarded before or after the introduction of GST — where the Schedule of Rates (SOR) used to prepare the Bill of Quantities had not been updated to incorporate applicable GST in place of the earlier West Bengal VAT.

He also sought a direction to neutralise the unforeseen additional tax burden on ongoing contracts awarded before GST came into force on 01.07.2017, and to have the State's SOR updated going forward.

The petition did not ask the Court to strike down any provision of the GST law; it sought an administrative/executive remedy for a rate-mismatch problem created by the transition from VAT to GST in government contracting.

Issues Involved

  1. Whether the respondent authorities could be directed by the Court to bear the additional GST burden on government contracts where the applicable Schedule of Rates had not been updated post-GST.
  2. What was the appropriate forum and process for the contractor's grievance to be addressed.

Petitioner's Arguments

  • Government contracts, whether awarded in the pre-GST or post-GST regime, continued to be billed against a Schedule of Rates that incorporated the now-inapplicable West Bengal VAT instead of GST, creating an unfair and unforeseen tax burden on contractors.
  • The authorities should be directed to neutralise this additional burden and to update the State SOR to reflect applicable GST rates.

Respondent's Arguments

  • Counsel for Raigunj Municipality and for the State of West Bengal appeared and were heard; the order does not itself record their specific counter-arguments, the matter being disposed of by way of a procedural direction rather than a contested ruling on the merits.

Court Order / Findings

  • The Court did not decide whether the State was liable to bear the additional GST burden or whether the SOR had to be updated; instead, it disposed of the petition by granting the petitioner liberty to file a representation on these very issues before the Additional Chief Secretary, Finance Department, Government of West Bengal, within four weeks.
  • It directed the Additional Chief Secretary to take a final decision on the representation within four months, after consulting other relevant departments and giving the petitioner (or his authorised representative) a hearing.
  • No coercive action was to be taken against the petitioner until the representation was decided, and the Additional Chief Secretary was directed to pass a reasoned, speaking order after considering relevant judgments of other High Courts that the petitioner might rely upon.
  • If the petitioner failed to file the representation within the stipulated time, the protective order would lose force.

Important Clarification

This order does not decide whether contractors are entitled to be compensated for the SOR/GST rate mismatch — it simply routes that question to the State's Finance Department for an administrative decision, with procedural safeguards (a hearing, a reasoned order, a four-month timeline, and interim protection from coercive action). Contractors facing the same issue should treat this as a template for seeking administrative redress, not as a precedent establishing entitlement to relief.

Sections Involved

  • Central Goods and Services Tax Act, 2017 and West Bengal SGST Act, 2017 – the post-01.07.2017 tax regime referenced as the source of the rate mismatch
  • West Bengal Value Added Tax Act, 2003 – the pre-GST tax the Schedule of Rates had originally been based on
  • Article 226 of the Constitution of India – writ jurisdiction invoked by the petitioner

Decision – In Favour of

Disposed of by way of a procedural direction rather than a decision on merits — the petitioner was granted liberty to make a representation to the State Finance Department, which was directed to decide it within four months; the underlying question of who bears the GST-transition cost was left open.

Case Details

High Court at Calcutta, Constitutional Writ Jurisdiction. WPA 22019 of 2023 (Prodyut Kumar Roy v. State of West Bengal & Ors.). Coram: Hon'ble Md. Nizamuddin, J. Order dated 20.09.2023.

Link to Download the Order

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