Case Analysis: State of West Bengal v. Union of India (2020) – Calcutta High Court

One of the significant recent judgments from Kolkata is State of West Bengal v. Union of India (2020), which revolved around the implementation of the Goods and Services Tax (GST) and its impact on state finances. This case became a key point of discussion in India's federal structure and the rights of states in the distribution of GST revenue.

The West Bengal government filed a petition before the Calcutta High Court, seeking a directive for the Union of India to release the pending GST compensation dues, which had been delayed due to issues surrounding the COVID-19 pandemic. The state government argued that the non-payment of dues was causing severe financial strain, especially given the increased expenditures due to pandemic-related containment measures.

The Court, in its ruling, acknowledged the financial challenges faced by the state but refrained from issuing a directive to the Union government, citing the legal complexities involved in the GST compensation mechanism. However, it urged the Union to prioritize resolving the issue through dialogue and negotiation to ensure equitable distribution of funds between the Union and the states.

This case highlights the ongoing debate over fiscal autonomy and the delicate balance of power between the Union and states in India’s federal framework. It underscored the importance of timely implementation of fiscal policies to ensure that states, especially those facing economic distress, can continue their developmental activities.