Is Google Web Toolkit is fine to develop database based web application or do you have any other suggestion?
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For a heavy Database based web application, nothing beats Grails. Check out this tutorial by IBM. It will show you the power of Grails and how easy it is to develop database based web applications in minutes. I love GWT and smartGwt, but will go for them over pure grails only if there is a lot of non-database based front end (client side) logic.
If you do not have a programming language of choice (Grails is groovy based, which is based on Java), you could even look at Ruby on Rails which was the inspiration for Grails itself.
Alternately, you can add both grails and gwt in the mix by using this gwt grails plugin so that you have a powerful database integration, as well as a powerful front end developer. (I haven’t used this though)