TaxTMI 
TaxTMI 
2025 (6) TMI 780
X X X X Extracts X X X X
X X X X Extracts X X X X
....Government of Andhra Pradesh, the 1st respondent herein, in so far as it has directed the Engineer-in-Chief & Chief Engineer (Projects), the 2nd respondent herein, to inform the agency that the amount provided in the IBM will be deducted from the agreement value and the consequential Memo dated 05/11/2008 and letter 05/12/2008 of the Superintending Engineer, Construction Circle, Ongole, the 3rd respondent herein, in respect of Agreement No. 10/2007-08, dated 21/06/2007, as illegal and void; and" 3. W.P. M.P. No. 37881/2008 is also filed by the Petitioner seeking stay of all further proceedings pursuant to Memo No. 12918/Maj.Irr.II/A22008-1 dated 21.05.2008 (Ex.P6). Vide order dated 31.12.2008, this Court has passed the following Interim Order: "Rule Nisi call for records. Notice returnable in four weeks. W.P. M.P. No. 37881 of 2008 There shall be interim stay as prayed for. However, this will not preclude the respondents from effecting recovery of such amounts, if necessary, at the time of settlement of final bill payable to the petitioner. Notice." 4. The facts, as projected by the Writ Petitioner, are that the Writ Petitioner is the Vice ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Writ Petitioner along with certification of the list of goods required to be imported are to be issued by the Sponsoring Authority, which is the District Collector. Therefore, the Writ Petitioner requested the Superintending Engineer to issue a recommendatory letter to the District Collector and also request the District Collector to further issue another recommendatory letter to the Commissioner of Customs, Seaport, Chennai, by certifying that the attached list of goods are exclusively required to be imported by the Writ Petitioner for the execution of 9.2 mtrs dia 18.8 KM long VeligondaTunnel-2 and most importantly for availing the facility of 'customs duty exemption' as per the Customs Notifications mentioned supra. The Superintending Engineer, in response to the request made by the Writ Petitioner and after examining the legal position, had addressed a Letter to the District Collector dated 07.06.2008; that the District Collector, Prakasam District, vide Proceeding dated 23.07.2008 (Ex.P.2) addressing to the Commissioner of Customs, Sea Port, Chennai, had clearly stated that the project benefits farmers for irrigating 4.38 lakh acres of land in Prakasam, Nellore and Kadapa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....it Petitioner has cited the relevant Clauses in the Contract Agreement and also the exemption which the Writ Petitioner is entitled to with regard to the customs duty and had informed the Superintending Engineer that the Writ Petitioner is not liable to pay any customs duty on the goods imported for the execution of irrigation and drinking water since the same has been granted exemption and therefore the same is neither payable by the Contractor nor is the Government entitled to recover the same from the Contractor (Writ Petitioner). 4.6. It is further submitted that on 05.12.2008 (Ex.P.8), the Superintending Engineer, has addressed a Letter to the Writ Petitioner that as per the latest guidelines of the Government, any exemption, in respect of Central Excise and Customs Duty etc., for the imported materials, imported duty etc., is to be remitted to the Government Account and that the customs duty amount, as provided in the IBM, will be deducted in the monthly bills as and when the IBM and other accessories are received in the site of work as per Government instructions. 4.7. Learned Senior Counsel would submit that the exemption from custom duty for irrigation and drinking w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....id. The Writ Petitioner has factored-in the beneficial exemptions that are likely to be enjoyed while quoting the bid rate. He would also submit that the Superintending Engineer as well as the District Collector, having considered the legal position thoroughly, has made recommendation in favour of the Writ Petitioner about its entitlement for its exemptions. 4.8. Learned Senior Counsel has drawn the attention of this Court to Clause 13.04 of the Tender Notice dated 01.11.2006 which relates to the Financial Bid. The Relevant Clauses are usefully extracted hereunder: "Cl. 13.04.2: "The rates and prices quoted by the Bidders are not subject to adjustment during the performance of the Contract for taxes, duties and any other levies except specified in the document. Cl. 13.04.5: All duties, taxes, and other levies payable by the contractor as per State/Central Government rules, shall be included in the contract value quoted by the Bidder. Likewise Clause 18.0 under the caption "Special Attention" is as below:- "18.0 SPECIAL ATTENTION While preparing the B id-Price the Bidders shall also take into account the following:- i) Infrast....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ith regard to qualifying amount of price bid with reference to criteria for award of work. He would also submit that the Contractor has quoted his price in accordance with requirements of the tender documents and that there is no clause or reference, either direct or indirect, anywhere in the contract documents that empower the Employer to make payments that has been made vide letters dated 05.11.2008 and 22.11.2008. He has drawn the attention of this Court to Clause 45.1 of the General Conditions of Contract dealing with Taxes and would submit that the goods imported for the purpose of use at Veligonda Tunnel-Project are exempted from Custom Duty and the same is thereby not payable by the Contractor. Learned Senior Counsel would submit that when Clause 45.1 of the General Conditions of Contract had categorically stated that the Petitioner would get an exemption with regard to Custom Duty as indicated above, it is obvious that the Writ Petitioner had never factored-in the Customs Duty into his calculation of bid price. Counter Affidavit of the Superintending Engineer, Construction Circle (Respondent No. 3): 5. It is contended in the Counter Affidavit that in compliance with t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bmitted to the Customs Authority. 8. Although the Proceeding was issued by the Secretary to Government on 21.05.2008 which is prior to the final recommendation made by the District Collector, this Court is of the opinion that this would have no bearing inasmuch as the date on which the tender was issued and the agreement was executed by the successful bidder, the Letter of Secretary to Government was never in existence. In other words, by the time that the Writ Petitioner had executed the contract agreement on 21.06.2007, the Proceeding of the Secretary to Government did not even take birth. The Proceeding of the Secretary to Government dated 21.05.2008 was issued nearly 11 months after the Contractual Agreement had been executed. It is a settled law that the Official Respondents even with regard to the execution of commercial targets, are required to follow the provisions of the Constitution, particularly Article 14 etc., 9. This Court has taken note of the General Conditions and terms of Contract. This Court has noticed that even in the Tender conditions, Clause 13.05.5 would stipulate that all duties, Taxes and other levies payable by the Contractor as per the State/Centra....