Facts of the Case

The petitioner, Ms. Mridula Paul, sole proprietor of M/s. Kalpan Construction, filed a writ petition against the Executive Engineer, West Bengal State Rural Development Agency, Burdwan 2 Division, and others, seeking a direction that the government bear the additional tax liability for executing subsisting government contracts — whether awarded before or after the GST rollout — where the Schedule of Rates (SOR) and Bill of Quantities (BOQ) had not been updated to incorporate applicable GST. She also sought neutralisation of the unforeseen additional tax burden on contracts awarded before 1 July 2017, and an update of the State's SOR to reflect GST in place of the earlier, inapplicable West Bengal VAT regime. This petition closely mirrors another contractor's writ (WPA 22010 of 2023, Prodyut Kumar Roy) disposed of by the same Bench on the same lines.

Issues Involved

  1. Whether contractors executing government works contracts, without the contract price updated to reflect GST, are entitled to relief from the State for the resulting additional tax burden.
  2. The appropriate mechanism for resolving such a claim.

Petitioner's Arguments

  • Government contracts continued to be billed against an SOR/BOQ that ignored applicable GST, leaving the contractor to unfairly absorb the additional tax cost since GST's introduction on 1 July 2017.
  • The State ought to neutralise this burden and revise its Schedule of Rates to reflect GST.

Respondent's Arguments

The order does not record a substantive contest from the State respondents on the merits; the disposal proceeded on a direction for administrative representation rather than adversarial argument.

Court Order / Findings

  • The Court disposed of the writ petition, directing the petitioner to file a representation before the Additional Chief Secretary, Finance Department, Government of West Bengal (Respondent No. 7), within four weeks.
  • The Additional Chief Secretary was directed to take a final decision within four months of receipt, after consulting all relevant departments and after giving the petitioner a hearing.
  • The decision was directed to be a reasoned, speaking order, considering relevant High Court judgments the petitioner might cite.
  • No coercive action was to be taken against the petitioner pending the final decision; a failure to file the representation within the stipulated time would render the order without force.

Important Clarification

As with the parallel order in Prodyut Kumar Roy, the Court did not decide whether the State is obliged to absorb the additional GST burden on legacy government contracts — it only fixed a time-bound administrative process for the claim to be examined by the Finance Department in the first instance.

Sections Involved

  • Central Goods and Services Tax Act, 2017 / West Bengal Goods and Services Tax Act, 2017 — transition from VAT to GST for government works contracts
  • Article 226, Constitution of India, 1950

Decision – In Favour of

Disposed of without a decision on merits; the petitioner was directed to pursue an administrative representation, with a time-bound reasoned decision to follow and interim protection from coercive action.

Case Details

  • Court: High Court at Calcutta
  • Case No.: WPA 21327 of 2023
  • Coram: Hon'ble Md. Nizamuddin, J.
  • Date of Order: 13 September 2023

Link to Download the Order

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