TaxTMI 
TaxTMI 
2021 (1) TMI 1354
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...."C" class contractor with the respondent-Department. Being the successful bidder, the petitioner was awarded the work for construction of the aforesaid building and Letter of Acceptance (for short "LOA") was issued in his favour on 02.06.2014. According to the terms of LOA, the petitioner was required to execute the entire work within 13 months excluding the rainy season. The cost of work was Rs. 129.50 Lac. An agreement was executed between the petitioner and the respondents. The time period for maintenance of the constructed work prescribed in the said agreement was two years from the date of completion of the work. Reference is made to Clause 18 of the agreement, Clause 18.1 whereof stipulates that the defect liability period of work in the contract shall be as per the contract data. It is contended that as per the stipulation contained in the contract data, the defect liability period in accordance with Clause 18.3 (GCC) read with its corresponding clause in contract data shall be of two years. The respondents have wrongly relied on Clause 29 of the agreement and the corresponding clause of the contract data and have treated the additional period of three months, beyond th....
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....formance guarantee and security on expiry of maintenance period on 07.03.2018. Though the defect liability period/maintenance guarantee period for building work was two years after completion of work on 08.03.2016, but Clause 29 of the contract data makes it abundantly clear that the performance guarantee (security) shall be valid for a period of three months beyond the completion of defect liability period. Therefore, the performance guarantee/security, in this case shall remain valid till 07.06.2018 i.e., beyond three months from 07.03.2018. As the petitioner was duly communicated by letter dated 23.05.2018 to complete the maintenance work and rectify the mistake on the basis of the inspection report dated 24.05.2018, the respondents were not obliged to refund the performance guarantee/security to the petitioner. 4. We have given our anxious consideration to the rival contentions of the parties and perused the record. 5. It is significant to note here that the respondents by way of an application for taking subsequent events on record dated 05.11.2020 have stated that the petitioner has deposited two FDRs bearing Nos. 736049 & 736031, amounting to Rs. 6,30,000/- &....
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....at normally in a case where tax or money has been realized without the authority of law, there is in such cases concomitant duty to refund the realization as a corollary of the constitutional inhibition that should be respected unless it causes injustice or loss in any specific case or violates any specific provision of law. If the tax was collected without authority of law, the respondents had no authority to retain the money and were liable to refund the same, held the Supreme Court. It held that in an application under Article 226 of the Constitution, the Court has power to direct refund, however, courts have made a distinction between those cases where a claimant approaches a High Court seeking relief of obtaining refund only and those where refund is sought as a consequential relief after striking down of the order of assessment etc. A petition solely praying for issue of a writ of mandamus directing the State to refund the money allegedly collected by the State of tax is not ordinarily maintainable for the simple reason that a claim for such a refund can always be made in a suit against authority which had illegally collected the money as a tax. In Godavari Sugar Mills Limite....
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....h particular case must necessarily be dependent on a variety of individual fact which must govern the proper exercise of the discretion of the Court, and that in a matter which is thus preeminently one of discretion, it is not possible or even if it were, it would not be desirable to lay down inflexible rules which should be applied with rigidity in every case which comes up before the Court." In Calcutta Discount Co. Ltd. (supra), the Supreme Court held as under: "Though the writ of prohibition or certiorari will not issue against an executive authority, the High Courts have power to issue in a fit case an order prohibiting an executive authority from acting without jurisdiction. Where such action of an executive authority acting without jurisdiction subjects or is likely to subject a person to lengthy proceedings and unnecessary harassment, the High Courts will issue appropriate orders or directions to prevent such consequences. Writ of certiorari and prohibition can issue against the Income Tax Officer acting without jurisdiction under Section 34, Income Tax Act." 10. The Supreme Court in Union of India and Another v. State of Haryana and Another - (2000) 10 SCC 4....
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.... unless it is shown that there is something more in a case, something going to the root of the jurisdiction of the officer, something which would show that it would be a case of palpable injustice to the writ petitioner to force him to adopt the remedies provided by the statute. It was noted by this Court in L. Hirday Narain v. Income Tax Officer, Bareilly, AIR (1971) SC 33 that if the High Court had entertained a petition despite availability of alternative remedy and heard the parties on merits it would be ordinarily unjustifiable for the High Court to dismiss the same on the ground of non-exhaustion of statutory remedies; unless the High Court finds that factual disputes are involved and it would not be desirable to deal with them in a writ petition." 14. In Zonal Manager, Central Bank of India vs. Devi Ispat Limited, (2010) 11 SCC 186, the Supreme Court held that writ of mandamus can be issued even in contractual matters and in paragraph- 28 of the said judgment, the apex Court held as under:- "28. It is clear that (a) in the contract if there is a clause for arbitration, normally, a writ court should not invoke its jurisdiction; (b) the existence of effective alter....
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....ve, whether or not in a particular case the writ court should entertain a petition under Article 226/227 of the Constitution of India rather than requiring the petitioner to avail alternative remedy, would always depend on the facts situation of a given case, upon the petitioner making out a strong case. If it is shown that the facts of the case are not disputed and the Government or its instrumentality has been found acting unjustly, unfairly and unreasonably even in regard to its contractual obligations, the High Court would be justified in entertaining the writ petition despite availability of alternative remedy. 17. In view of what has been discussed above, the question is no longer res integra that if instrumentality of the State acts contrary to the public good, public interest unfairly, unjustly, unreasonably, discriminatory and violative of Article 14 of the Constitution of India in its contractual or statutory obligation, the writ petition would be maintainable. 18. It is not in dispute that the defect liability period/maintenance guarantee period is two years from the date of completion of the work. This period shall commence on 08.03.2016 and come to end on 07.03.2....
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.... be taken by the Engineer in Charge as below : (a) Deploy departmental labour and material or (b) Engage a contractor by issuing a work order at contract rate/SOR rate or (c) Sanction supplementary work in an existing agreement to a contractor for zonal works or similar other work or (d) Invite open tender or (e) Combination of above 29 Performance guarantee (Security) shall be valid up to Three months beyond the completion of Defect Liability period (Maintenance Guarantee Period 19. Clause 18.1 of the agreement provides that the defect liability period of work in the contract shall be as per the contract data. The corresponding Clause 18 in the contract data provides that the defect liability period would be of two years. It is not disputed even by the respondents that the defect liability period is only of two years from the date of completion of the work. Clause 18.2 of the agreement provides that the Contractor shall promptly rectify all defects pointed out by the Engineer well before the end of the defect liability period. However, additionally it provides that the defect liability period shall autom....
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....trary and unreasonable, being violative of Article 14 of the Constitution of India. The respondents are therefore not justified in withholding the amount of performance guarantee (security) deposited by the petitioner and then insisting upon the petitioner to invoke arbitration clause rather than invoking writ jurisdiction of this Court under Article 226 of the Constitution of India. When the facts are not in dispute and it has been established to the satisfaction of this Court that the respondents have acted arbitrarily and contrary to the relevant stipulations in the agreement and the contract data, the availability of alternative remedy, in the facts of the present case, cannot justify rejection of the present writ petition on the spacious plea of alternative remedy. The alternative remedy of dispute resolution system by way of an application to the competent authority and thereafter to the appellate authority and then thereafter to the Arbitration Tribunal, in the facts of the present case, cannot be taken as an efficacious alternative remedy, particularly when Section 17 of the Adhiniyam of 1983 bars the Tribunal from granting any interim relief. In the facts of the present ca....