Tax Liability Confirmed: Service Supply Triggers Assessment Regardless of Payment Status Under WBGST Act Section Provisions

HC dismissed appellant's appeal challenging tax assessment under WBGST Act. Court held that tax liability arises upon service supply, independent of contractee's payment. Appellant remains responsible for tax dues despite non-payment by contractee. Court allowed potential remedies against contractee while maintaining original assessment order.

---

---

Issues:
1. Appeal against assessment order under West Bengal Goods and Service Tax Act, 2017.
2. Dismissal of appeal by the first appellate authority.
3. Dismissal of writ petition by the learned Single Judge.
4. Appeal against the judgment of the learned Single Judge.
5. Liability of the appellant to pay tax due to non-payment by the contractee.
6. Interpretation of the GST Act regarding tax liability.

Analysis:
The appellant, a registered contractor under the CGST Act/WBGST Act, challenged the assessment order for the tax period 2018-2019, where tax was imposed. The first appellate authority dismissed the appellant's appeal, stating that non-payment of tax by the contractee does not absolve the appellant from tax liability. The appellant's writ petition against this decision was also dismissed by the learned Single Judge, leading to the current appeal.

The main argument raised by the appellant was that although the contract was awarded in the Pre-GST regime, the work was executed in the Post-GST regime, resulting in a GST liability. The appellant contended that since the contractee had not paid the GST, the appellant should not be liable to pay the assessed tax. The State advocate supported the lower court's decision.

The High Court analyzed the situation, emphasizing that under the GST Act, the event of taxation occurs upon the supply of goods or services, leading to a tax liability. The court noted that the appellant did not challenge the assessment of tax liability itself but rather the non-payment by the contractee. The court held that the GST Act is self-contained, and an assessee's tax payment is not contingent on the contractee's payment. Therefore, the court found no legal error in the Single Judge's decision.

Consequently, the High Court dismissed the appeal, stating that there was no merit in the appellant's arguments. However, the court allowed the appellant the liberty to pursue remedies against the contractee for the non-payment, leaving it open for the appellant to take appropriate legal action or submit a representation for redressal of the non-payment issue.

In conclusion, the High Court upheld the lower court's decision, emphasizing the self-contained nature of the GST Act and the independent tax liability of the appellant regardless of the contractee's payment status.

---