Company Taking Calculated Business Risk Cannot Challenge Root Of Contract Merely Due To Change In Tax Laws: Calcutta HC Denies GST Refund
Case: Kayal Construction Vs. The State of West Bengal & Ors
Coram: Justice Sabyasachi Bhattacharya
Case No.: WPA 17188 of 2023
Court Observation: Introduction of the GST regime has not taken away the certainty of price. Even if the petitioner argues that the taxes have been enhanced, the same was factored into the original clauses of the contract. Mere replacement of Sales Tax, Excise Duty, VAT and other similar taxes by the GST regime does not change such parameters in any manner. In fact, even Sales Tax, VAT, Excise Duty and other levies specifically enumerated by way of example in the contract can very well be enhanced from time to time by the revenue authorities.
The relevant clause in the contract contemplates that the contractor/bidder is to quote its rate accordingly after considering “all these charges”, thus referring to the taxes mentioned therein. Such taxes were Income Tax, VAT, Sales Tax, Royalty, Construction Workers‟ Welfare Cess and “similar other statutory levy/Cess. The GST Act has merely subsumed the indirect taxes payable by a supplier for the entire service chain and has not introduced any additional set of taxes
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Company Taking Calculated Business Risk Cannot Challenge Root Of Contract
