2024 (8) TMI 1377 - HC - GST

Petition Challenges Additional Tax Liabilities on Government Contracts; Decision Expected in July 2024.

The HC entertained a writ petition challenging additional tax liabilities on government contracts pre and post-GST regime, due to Tribunal unavailability. ... Direction to bear additional tax liability - update Schedule of Rates incorporating GST - representation to administrative authority for adjudication - interim protection from coercive recovery on deposit - entertainment of writ in absence of statutory appellate forum - obligation to pass a reasoned and speaking orderDirection to bear additional tax liability - update Schedule of Rates incorporating GST - representation to administrative authority for adjudication - obligation to pass a reasoned and speaking order - Liberty granted to petitioner to place representation before the Additional Chief Secretary, Finance Department for consideration of bearing additional tax liability and updating State Schedule of Rates to incorporate GST; administrative decision directed within a specified time with opportunity of hearing. - HELD THAT: - The court declined to adjudicate the substantive claim itself and instead granted the petitioner liberty to file an appropriate representation before the Additional Chief Secretary, Finance Department within four weeks. The Additional Chief Secretary is directed to take a final decision on that representation within four months of receipt, after consulting relevant departments and after giving the petitioner or his authorised representative an opportunity of hearing. The order expressly requires that the decision be a reasoned and speaking order and that relevant High Court judgments relied upon by the petitioner be considered. Failure by the petitioner to file the representation within the stipulated time renders the order inapplicable to him. [Paras 4, 5, 6]Representation to be filed within four weeks; Additional Chief Secretary to decide within four months after consultation and hearing; decision to be reasoned and speaking.Interim protection from coercive recovery on deposit - entertainment of writ in absence of statutory appellate forum - Interim protection granted against coercive recovery arising from the impugned appellate order under the WBGST Act, conditional on deposit of a specified portion of the disputed tax; further pleadings directed. - HELD THAT: - The court noted that the impugned order dated 30th January, 2024 is ordinarily appealable to the statutory tribunal, but since that forum is not available, the writ petition is entertained. The court held that the issues cannot be finally adjudicated without affidavits from respondents and therefore directed respondents to file affidavit-in-opposition within four weeks and allowed the petitioner to file a reply within two weeks thereafter. Meanwhile, no coercive steps for recovery shall be taken if the petitioner deposits a further twenty per cent of the remaining disputed tax within ten days; failure to make the deposit removes the interim protection. These directions preserve the parties' rights while ensuring procedural opportunity for evidence and counter-affidavits. [Paras 7, 8, 9, 10]Respondents to file affidavit-in-opposition; petitioner may reply; interim bar on coercive recovery if petitioner deposits further 20% of disputed amount within ten days, otherwise protection lapses.Final Conclusion: Petition entertained partly for administrative adjudication: petitioner permitted to file representation for consideration of GST impact and update of State SOR, with the Additional Chief Secretary directed to decide within four months after hearing and to pass a reasoned order; separate interim relief granted against coercive recovery of the disputed tax subject to the conditional deposit and filing of affidavits for further adjudication. Issues:1. Relief sought for additional tax liability on Government contracts pre and post GST regime.2. Seeking direction to neutralize the impact of unforeseen additional tax burden.3. Challenge against the impugned order dated 30th January, 2024 under the WBGST Act.4. Entertaining the writ petition due to unavailability of the Tribunal.5. Filing of affidavits by respondents and petitioner.6. No coercive steps for recovery if petitioner deposits further 20% of disputed tax amount.7. Listing the matter for final hearing in July 2024.Analysis:1. The writ petition was filed seeking relief for the additional tax liability on Government contracts awarded before and after the introduction of GST. The petitioner requested a direction for the authorities to bear the tax liability without updating the Schedule of Rates (SOR) to incorporate applicable GST. The petitioner also sought to neutralize the impact of unforeseen tax burdens on ongoing contracts and update the State SOR with applicable GST going forward.2. The court granted liberty to the petitioner to submit a representation to the Additional Chief Secretary, Finance Department, Government of West Bengal within four weeks. The Additional Chief Secretary was directed to make a decision within four months after consulting relevant departments and considering the petitioner's submissions. No coercive action was to be taken against the petitioner until a final decision was made.3. The writ petition also challenged an order passed by the appellate authority under the WBGST Act. Since the Tribunal was unavailable, the court decided to entertain the petition. The court emphasized that the issues raised required affidavits from the respondents to be adjudicated properly.4. The court directed the respondents to file an affidavit-in-opposition within four weeks, with the petitioner given two weeks to respond. No coercive steps for recovery were to be taken if the petitioner deposited an additional 20% of the disputed tax amount within ten days.5. The matter was scheduled for final hearing in July 2024, with both parties instructed to prepare short written notes of arguments for the hearing. The court emphasized the importance of following due process and considering all relevant judgments in making decisions related to the representation filed by the petitioner.