Pre-deposit in works contract dispute set aside for ignoring existing evidence on supply value and related stay issues.

The HC held that a Tribunal cannot direct pre-deposit without considering evidence already on record on the value of goods and materials supplied under a works contract. Because the supply value may form part of a composite arrangement and must be examined to determine whether any sale of goods was involved, the Tribunal was required to take at least a prima facie view on that material. The appellant's objections on limitation and incorrect computation of demand also required reconsideration in the stay proceedings. The pre-deposit order was set aside and the matter remanded for fresh consideration of the stay application after hearing both parties.

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Issues: Whether the Tribunal was justified in directing a pre-deposit without considering the evidence already on record regarding the value of goods and materials supplied in execution of the works contract.

Analysis: The evidence of the value of goods supplied was already before the adjudicating authority, but the Tribunal proceeded as if no such material existed. In a works contract or job work arrangement, the supply value of goods may form part of a composite amount and requires examination in context to determine whether there was also a sale of goods. The Tribunal had not taken even a prima facie view on this material. The appellant also raised contentions on limitation and incorrect computation of demand, which required reconsideration by the Tribunal in the stay proceedings.

Conclusion: The Tribunal's order directing pre-deposit was set aside and the matter was remanded to the Tribunal for fresh consideration of the stay application after hearing the parties.

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