GST Reimbursement Can’t Be Denied for Post-GST Contracts | HC

Case Details: Pinki Construction vs. Executive Engineer, North Bengal Development Department - [2025] 175 taxmann.com 458 (Calcutta)

Judiciary and Counsel Details

• Smita Das De, J.
• Vinay Shraff, Himangshu Kumar Ray, Ms Shiwani Shaw, Ms Swarnwarshi Poddar, Animitra Roy & Anish Mandal for the Petitioner.
• Anirban Ray, Ld. GP, Md. T.M. Siddiqui, Ld. AGP, Tanoy Chakraborty & Saptak Sanyal for the Respondent.

Facts of the Case

The petitioner, a government works contractor, executed public works contracts under the Government of West Bengal during the period from 01-07-2017 to 31-03-2019. In respect of these contracts, the petitioner discharged GST on the gross bill amounts and sought reimbursement of the GST component, consistent with contractual expectations and statutory obligations under Section 9 of the CGST Act and the West Bengal GST Act. The revenue authorities denied reimbursement by invoking paragraph 3(iv) of Notification No. 5050-F(Y), dated 16-08-2017 , issued by the Finance Department (Audit Branch), Government of West Bengal.

The petitioner submitted that paragraph 3(iv) applied solely to contracts executed prior to the introduction of GST and could not govern contracts entered into after 01-07-2017, which were instead covered by paragraph 4 of the same notification. It was contended that the revenue authorities failed to appreciate this statutory distinction, resulting in arbitrary denial of reimbursement and violation of Article 14 of the Constitution. Upon sustained non-resolution of the grievance, the matter was accordingly placed before the Calcutta High Court.

High Court Held

The Calcutta High Court held that the revenue authorities had erroneously applied paragraph 3(iv) of Notification No. 5050-F(Y), dated 16-08-2017 , which was confined in its applicability to pre-GST contracts. The Court noted that contracts executed after 01-07-2017 are governed exclusively by paragraph 4 of the said notification and that extending paragraph 3(iv) to such contracts was both legally unsustainable and administratively flawed.

The Court observed that the petitioner had duly paid GST from its own funds and that denial of reimbursement on a misreading of the notification was unjustified. Accordingly, the Court directed the Secretary, Public Works Department, Government of West Bengal, to re-examine the petitioner’s claim strictly in light of paragraph 4 and to pass a reasoned, speaking order after granting the petitioner an opportunity of hearing.

List of Cases Referred to

• Sushil Kumar Thard v. National Jute Manufactures Corporation Ltd. [WPA No. 4751 of 2023, dated 27-9-2023] (para 4)
• National Jute Manufactures Corporation Ltd. v. Sushil Kumar Thard [SLP(C) No. 25436 of 2023, dated 28-11-2023] (para 4).