Post-contract tax reimbursement depends on contractual intent, but no immediate payment lies unless the tax is actually deposited.

A tax introduced after a contract is made is recoverable from the other party only if the contract shows a different intention. Here, although the bid terms described prices as inclusive of taxes and duties, the service tax arose only after the bid and contract dates, so it was not treated as part of the contractor's original contractual obligation. However, no immediate reimbursement was allowed because the contractor had not deposited the tax for many years and was claiming an amount not yet paid. The contractor's entitlement was recognised only in principle, subject to actual deposit of the service tax.

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Issues: Whether service tax introduced after the bid and contract date was reimbursable by the Railways under the contract terms, and whether any present monetary claim could be allowed when the contractor had not deposited the tax.

Analysis: The contract and bid documents were construed to ascertain the intention of the parties. Although the price was described as inclusive of taxes and duties, the levy of service tax arose only after the bid was submitted and after the contract had been formed. On that basis, the later-imposed service tax was not treated as part of the bidder's pre-existing contractual obligation. Reliance was placed on the principle that a tax introduced after the making of a contract is recoverable from the other contracting party only if the contract shows a different intention. At the same time, the Court noted that the contractor had not deposited the service tax for many years and was seeking reimbursement of an amount not yet paid.

Conclusion: The later-imposed service tax was held to be reimbursable in principle if and when paid by the contractor, but no present monetary reimbursement was allowed because the tax had not been deposited.

Final Conclusion: The petition was disposed of by recognising the contractor's entitlement to reimbursement only upon actual deposit of the service tax and by declining any immediate financial relief.

Ratio Decidendi: Where a tax is imposed after the making of a contract, reimbursement depends on the contractual intention, and no present claim for reimbursement lies unless the tax has actually been paid or deposited by the claimant.

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