TaxTMI 
TaxTMI 
2020 (5) TMI 267
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....pay service tax under the contract but was exempted and hence, the consideration payable by the respondent gets reduced. 3. As per the petitioner, the respondent has withheld a sum of Rs. 1,97,00,109/- towards the element of service tax from the running account bills raised by the petitioner for the period w.e.f. June, 2012 to May, 2016. 4. The case of the petitioner is that it was providing the services of lifting/collecting of municipal solid waste/garbage/malba/drain silt etc. and dumping the same to nearby designated site. It is pleaded that the services provided by the petitioner to the respondent under the said work order are exempted from taxable services as the same form part of the exempted list of services under section 93 of the Finance Act, 1994. It is also pleaded that the service tax was not applicable on the services provided by the petitioner to the respondent either at the time of award of the contract or presently. 5. On 15.03.2012, the MCD invited quotations for hiring of Light Motor Vehicle (hereinafter referred to as 'LMV') with auto tipping facility with driver of Gross Vehicle Weight of 1550 Kg. for narrow lanes with one labourer etc. The petitioner quoted....
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.... where the petitioner agreed to receive at the rate of Rs. 1,830/- per day per vehicle. It is pleaded that this lesser amount does not include service tax, as none was payable. It is further pleaded that the present writ petition is not maintainable as the petitioner ought to have filed a suit for recovery as the petitioner is claiming certain amounts as due and payable to it by the municipal corporation. It is also pleaded that disputed questions of facts arise and hence the present writ petition is not maintainable. 10. I have heard the learned counsel for the parties. 11. The learned counsel for the petitioner, Ms. Manmeet Arora has made the following submissions: (i) It is pleaded that the issue involved is short and simple. The only issue is as to whether the respondent is entitled to deduct the amounts for alleged service tax, which is not payable by the petitioner in terms of the Agreement between the parties. Hence, this writ petition is maintainable. (ii) It is further pleaded that the consideration that was payable by the respondent was Rs. 1934/- is per day per vehicle for eight hours and there is nothing to show that any component of this amount included service ta....
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....ed the submissions made in the counter-affidavit. 13. I may first look at the relevant clause of the work order w.e.f. 02.06.2012 between the parties, which read as follows: "Dear Sir, With reference to inviting offer in the subject matter and your bid submission in the matter, your tender has been accepted on behalf of the competent authority in SDMC at your negotiated / finally offered tender rates [contract unit rate[fee]], which is described as here below: Finally offered rate = Rs. 1934/- (Rupees One Thousand Nine Hundred and Thirty Four) (Per day Per Vehicle) For 08 Hours of working. The rates includes registration charges, parking charges, washing charges, insurance, service tax, Labour Cess, accident claims (if any), cost of fuel, lubricating oil, water.etc., Challan, salary to driver as well as labour, implementation of all labour relates law (in respect of driver & labours) and all repairs & maintenance etc. Vehicles will be hired for a maximum period of 5years from the date of issue of the Work Order, on daily basis or as required by the department and the escalation on the awarded rate due to increase/ decrease in fuel and minimum wages, will be paid as fol....
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.... whereas it is an included element in the rate. Hence, the report concludes that this amount has been wrongly released. 17. In my opinion the said conclusion of the Audit team is wrong and arrived at de hors the terms of the agreement dated 27.08.2012 between the parties. The agreed rate as per the agreement is fixed at Rs. 1934/- per day all inclusive. The rate doe not vary based on increase or decrease of various stipulated components including service tax. The clear terms of the agreement do not warrant deduction of rates other than on account of full or minimum wages. Hence, there was no justification for the respondent to deduct the payments of the petitioner on account of exemption of service tax. 18. My above conclusion is fortified by another important fact. The petitioner has taken a stand that the service tax was exempt on the said service even prior to 20.06.2012. It pleaded that on 01.06.2017 Section 66 of Service Tax Finance Act came into effect. It provided that service shall be levied at the rate of 12% of the value of the taxable service which are listed in clause 105 of Section 65 of the said Act. It is stated that Section 65, clause 105 does not anywhere specify ....
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.... the parties as a remaking of the contract; nor do the courts so regard it. Instead, it is merely a further expression by the parties of the meaning that they give and have given to the terms of their contract previously made. There is no good reason why the courts should not give great weight to these further expressions by the parties, in view of the fact that they still have the same freedom of contract that they had originally. The American Courts receive subsequent actings as admissible guides in interpretation. It is true that one party cannot build up his case by making an interpretation in his own favour. It is the concurrence therein that such a party can use against the other party. This concurrence may be evidence by the other party's express assent thereto, by his acting in accordance with it, by his receipt without objection of performances that indicate it, or by saying nothing when he knows that the first party is acting on reliance upon the interpretation (see Corbin on Contracts, Vol. 3, pp.249 & 254-56). ....... 15. In Deo v. Rias [(1832) 8 Bing 178, 186] Tindal, C.J. said: "We are to look at the words of the instrument and to the acts of the parties to ....
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....per vehicle i.e. less the service tax. This contention does not help the petitioner. The fresh work order dated 22.032016 has been done by the consent of parties. Parties while negotiating a fresh contract were free to agreed on any rate mutually convenient. Even in this case the petitioner was free under Section 73 of the Contract Act to operate the contract and by consent of parties modify the rates. No such thing was done here. The respondent unilaterally sought to reduce the rate. 25. The next contention raised by the learned counsel for the respondent is that the present writ petition for recovery of money does not lie. The petitioner was obliged to file a suit for recovery. 26. I may look at the legal position in this regard. Reference may be had to the judgment of the Supreme Court in the case of Godavari Sugar Mills Ltd. vs. State of Maharashtra and Ors., (2011) 2 SCC 439. The Supreme Court held as follows:- "8. The observations in Suganmal [AIR 1965 SC 1740] related to a claim for refund of tax and have to be understood with reference to the nature of the claim made therein. The decision in Suganmal [AIR 1965 SC 1740] has been explained and distinguished in several sub....
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.... taxes collected was without authority of law and therefore the respondents had no authority to retain the money collected without any authority of law, the High Court has the power to direct refund in a writ petition. (Vide Salonah Tea Co. Ltd. v. Supdt. of Taxes [(1988) 1 SCC 401 : 1988 SCC (Tax) 99 (2)] .) (v) It is one thing to say that the High Court has no power under Article 226 of the Constitution to issue a writ of mandamus for making refund of the money illegally collected. It is yet another thing to say that such power can be exercised sparingly depending on facts and circumstances of each case. For instance, where the facts are not in dispute, where the collection of money was without the authority of law and there was no case of undue enrichment, there is no good reason to deny a relief of refund to the citizens. But even in cases where collection of cess, levy or tax is held to be unconstitutional or invalid, refund is not an automatic consequence but may be refused on several grounds depending on facts and circumstances of a given case. (Vide U.P. Pollution Control Board v. Kanoria Industrial Ltd. [(2001) 2 SCC 549] ) (vi) Where the lis has a public law charact....