TaxTMI 
TaxTMI 
2026 (3) TMI 1680
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....or refund of differential amount i.e. 6% GST amount was rejected. The petitioner further prayed to direct the official respondent to refund the differential rate of GST i.e. 6% to the petitioner along-with interest from the date of effective revision of GST rate in compliance of circular dated 02.07.2024 (Annex. 17). The petitioner also prayed that if any order prejudicial or detrimental to the interest of the petitioner is passed during the pendency of the writ petition, the same may kindly be taken on record and quashed and set aside. 2. The facts of the case in nutshell are that the Rajasthan State Road Development & Construction Corporation Ltd. (for short 'the RSRDCC') awarded a contract to the petitioner for construction of 'Centre for Excellence for Revenue, Research & Analysis' at Jhalana, opposite Aranya Bhawan for which a work order was issued to the petitioner-Firm on 25.10.2021 (Annex. 10 in the writ petition). The petitioner-Firm completed the work on 10.02.2023. When the work order was issued the GST Rate was 12%, however, during the course of execution of work, it was increased from 12% to 18%. The petitioner-Firm demanded refund of 6% from the date of revision....
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.... the present case. He also submitted that since the contractors to whom the Public Works Department has entrusted some contracts are entitled for refund of differential amount of the GST in view of the order dated 07.01.2021, the petitioner who is also a Contractor, is also entitled for the same benefit and the act of the respondents in not extending the said benefit to the petitioner is discriminatory. To support the submissions, Senior Counsel has placed reliance upon following judgments:- (i) Godrej Sara Lee Ltd. v. Excise and Taxation Officer-cum-Assessing Authority & Ors., reported in 2023 SCC OnLine SC 95; and (ii) M/s. Ankita Construction v. The State of Rajasthan & Anr., (S.B. Civil Writ Petition No. 19871/2023) decided on 12.07.2024. 4. Mr. Kuldeep Singh Rathore & Ms. Harshita Sharma appearing for Ms. Mahi Yadav, AAG on behalf of respondents No. 1,2 and 5 opposed the submissions and submitted in the reply to the writ petition that Clause 36E of Conditions of Contract of Appendix-XI to the said Rules and Circular issued by the respondent No.5 is misplaced as the said rules are not applicable to the respondents No. 3 and 4. He submitted that the said ....
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....appearing for the respective parties and gone through the entire material made available to the Court including the judgments relied upon. 8. One of the issue raised by the counsels appearing for the respondents is that as regards the dispute in contractual matters the writ petition is not maintainable. It is also submitted that since the contract agreement provides for a dispute redressal system in Clause 24 of the Contract Agreement / bid document, the petitioner should have approached the Competent Authority. 9. The Hon'ble Apex Court in the case of Gas Authority of India Limited v. Indian Petrochemicals Corporation Limited & Others, reported in (2023) 3 SCC 620 has observed in paras 20, 21 and 29 as under:- "20. In our view, the dispute is within the following parameters. First, whether the writ petition filed by IPCL challenging Clauses 4.04 and 10.01 of the contract was maintainable. Second, assuming such a petition was maintainable, whether the High Court could have invalidated the aforementioned clauses on the ground of unequal bargaining power and arbitrariness/unfairness. Third, whether monetary relief in the form of refund could have been granted after the....
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..... The petitioner without availing any of the aforementioned alternative remedies available to it in accordance with law, has preferred the present writ petition, therefore, the same is not maintainable." 11. The another case law referred by the learned counsels appearing for the respondents is the order delivered by the Coordinate Bench of this Court in the case of Mahadev Stone Crusher (supra), wherein the Coordinate Bench of this Court in paras 4,9,10,12 and 13 has observed as under:- "4. Learned counsel for the petitioner submits that according to Section 15 of the Rajasthan Transparency in Public Procurement Act, 2012 (hereinafter referred to as 'the RTPP Act') no price negotiation can be held by a procuring entity with respect to a bid negotiation except as provided in Section 31 or Section 35 of the RTPP Act. He further submits that in the present case the bidding process was a two stage bidding process as provided under Section 32 of the RTPP Act, thus, the case of petitioner does not fall either under Section 31 or Section 35 of the RTPP Act, and therefore, the action of the respondents in calling for negotiation vide letter dated 09.10.2024 (Annex.4), after the....
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...., action or omission of the procuring entity. Section 38 is reproduces as under: "38. Appeals.- (1) Subject to section 40, if any bidder or prospective bidder is aggrieved that any decision, action or omission of the procuring entity is in contravention to the provisions of this Act or the rules or guidelines issued thereunder, he may file an appeal to such officer of the procuring entity, as may be designated by it for the purpose, within a period of ten days or such other period as may be specified in the pre-qualification documents, bidder registration documents or bidding documents, as the case may be, from the date of such decision or action, omission, as the case may be, clearly giving the specific ground or grounds on which he feels aggrieved: Provided that after the declaration of a bidder as successful in terms of section 27, the appeal may be filed only by a bidder who has participated in procurement proceedings: Provided further that in case a procuring entity evaluates the technical bid before the opening of the financial bid, an appeal related to the matter of financial bid may be filed only by a bidder whose technical bid is found to be acce....
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....e petitioner majorly rests on two contentions; Firstly, that the action of the Respondents in conducting negotiation at the post-bid stage is illegal in terms of Section 15 of the RTPP Act read with Rule 69 of the RTPP Rules; Secondly, The Respondents could not have rejected the bid of the petitioner as the petitioner was the lowest bidder and also could not have issued a fresh NIT (Annex.8) without affording the petitioner the opportunity of hearing." 12. The Hon'ble Apex Court in the case of ABL International Ltd. & Anr. v. Export Credit Guarantee Corporation of India Ltd. & Ors., reported in (2004) 3 SCC 553 has observed in paras 8,10, 23, 25, 27, 52 and 53 as under:- "8. As could be seen from the arguments addressed in this appeal and as also from the divergent views of the two courts below, one of the questions that falls for our consideration is whether a writ petition under Article 226 of the Constitution of India is maintainable to enforce a contractual obligation of the State or its instrumentality, by an aggrieved party. *** 10. It is clear from the above observations of this Court in the said case, though a writ was not issued on the facts o....
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.... of the first respondent at para 10 read: "To undertake such functions as may be entrusted to it by the Government from time to time, including grant of credits and guarantees in foreign currency for the purpose of facilitating the import of raw materials and semi-finished goods for manufacture or processing goods for export." Para 11 of the said object reads thus: "To act as agent of the Government, or with the sanction of the Government on its own account, to give the guarantees, undertake such responsibilities and discharge such functions as are considered by the Government as necessary in national interest." *** 25. The learned counsel for the respondent then contended that though the principal prayer in the writ petition is for quashing the letters of repudiation by the first respondent, in fact the writ petition is one for a "money claim" which cannot be granted in a writ petition under Article 226 of the Constitution of India. In our opinion, this argument of the learned counsel also cannot be accepted in its absolute terms. This Court in the case of U.P. Pollution Control Board v. Kanoria Industrial Ltd. [(2001) 2....
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....r 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, in the cases on hand where facts are not in dispute, collection of money as cess was itself without the authority of law; no case of undue enrichment was made out and the amount of cess was paid under protest; the writ petitions were filed within a reasonable time from the date of the declaration that the law under which tax/cess was collected was unconstitutional. There is no good reason to deny a relief of refund to the citizens in such cases on the principles of public interest and equity in the light of the cases cited above. However, it must not be understood that in all cases where collection of cess, levy or tax is held to be unconstitutional or invalid, the refund should necessarily follow. We wish to add that 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 circumsta....
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....bitrariness which is basic to rule of law - from State actions in contractual field is not justified. This is more so when the modern trend is also to examine the unreasonableness of a term in such contracts where the bargaining power is unequal so that these are not negotiated contracts but standard form contracts between unequals. Unlike the private parties the State while exercising its powers and discharging its functions, acts indubitably, as is expected of it, for public good and in public interest. The impact of every State action is also on public interest. It is really the nature of its personality as State which is significant and must characterize all its actions, in whatever field, and not the nature of function, contractual or otherwise, which is decisive of the nature of scrutiny permitted for examining the validity of its act. The requirement of Article 14 being the duty to act fairly, justly and reasonably, there is nothing which militates against the concept of requiring the State always to so act, even in contractual matters. This factor alone is sufficient to import at least the minimal requirements of public law obligations and impress with this charact....
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....should not inhibit the High Court or this Court from granting the relief sought for by the petitioner." 13. The Hon'ble Apex Court in the case of Godrej Sara Lee Ltd. v. Excise and Taxation Officer-cum-Assessing Authority & Ors., reported in 2023 SCC OnLine SC 95 has observed in paras 2,4 and 8 as under:- "2. Two questions emerge for decision on this appeal. First, whether the High Court was justified in declining interference on the ground of availability of an alternative remedy of appeal to the appellant under section 33 of the VAT Act, which it had not pursued. Should the answer to the first question be in the negative, we would next be required to decide whether to remit the writ petition to the High Court for hearing it on merits or to examine the correctness or otherwise of the orders impugned before the High Court. *** 4. Before answering the questions, we feel the urge to say a few words on the exercise of writ powers conferred by article 226 of the Constitution having come across certain orders passed by the High Courts holding writ petitions as "not maintainable" merely because the alternative remedy provided by the relevant statutes has not....
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....ation. On the other hand, the question of "entertainability" is entirely within the realm of discretion of the High Courts, writ remedy being discretionary. A writ petition despite being maintainable may not be entertained by a High Court for very many reasons or relief could even be refused to the petitioner, despite setting up a sound legal point, if grant of the claimed relief would not further public interest. Hence, dismissal of a writ petition by a High Court on the ground that the petitioner has not availed the alternative remedy without, however, examining whether an exceptional case has been made out for such entertainment would not be proper. *** 8. That apart, we may also usefully refer to the decisions of this Court reported in (1977) 2 SCC 724 (State of U. P. v. Indian Hume Pipe Co. Ltd.) (1977) 39 STC 355 (SC). and (2000) 10 SCC 482 (Union of India v. State of Haryana). What appears on a plain reading of the former decision is that whether a certain item falls within an entry in a sales tax statute, raises a pure question of law and if investigation into facts is unnecessary, the High Court could entertain a writ petition in its discretion even thoug....
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.....01.2021? 16. Learned Senior Advocate appearing for the petitioner submitted that the RSRDCC is a State as this is a Government Undertaking being run with the funds of the Government and its administration is in the hands of the Government Officers. 17. Counsel appearing for the respondent-RSRDCC is is not denying that the RSRDCC is not functioning totally with the funds of the State Government. The list of the Board of Directors of the RSRDCC shows that a Chairperson is the Hon'ble Deputy Chief Minister, Public Works Department, its Vice Chairman is Principal Secretary, PWD, GoR, and others Directors are Mr. Naveen Jain, IAS, Principal Secretary, Planning Department, Dr. Manish Arora, IAS, Commissioner Transport Department, Mr. D.R. Meghwal, Secretary to the Govt. and Chief Engineer, PWD, Rajasthan, Mr. Naresh Kumar Thakral, IAS, is Secretary to the Govt., Finance (Exp.), Rajasthan and the Managing Director of the RSRDCC is Mr. Sunil Jai Singh. The financial and administrative control of RSRDCC is with the Government of Rajasthan. 18. After due process of completion of the bid proceedings, the respondent-RSRDCC vide letter dated 21.10.2021 accepted the bid of the petition....
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....avement, the design mix of the controlled concrete shall be got done from any Govt. Engineering College, PWD Laboratory or any NABL accredited laboratory. The same shall be submitted to the Engineer in Charge before commencement of the work for approval." 22. On perusal of the letter dated 08.11.2024 (Annex.23) written to the petitioner by the respondent-RSRDCC, it is somewhat clear that the circulars and the orders issued by the Chief Engineer, Public Works Department, Jaipur, are also being followed by the respondent-RSRDCC. On an information sought under the Right to Information Act, 2005 (for short 'the Act of 2005') by a third party, the Office of the Public Information Officer, Executive Engineer, Public Works Department, Division Seemalwada, District Dungarpur, clearly states that the respondent-RSRDCC is a Company owned or managed by the Public Works Department within the State of Rajasthan and outside the Rajasthan. 23. Senior Counsel appearing for the petitioner has placed before the Court the document (Annex.21), which is extract, taken from the Website of the respondent-RSRDCC, wherein the Act and the Rules which are applicable in the RSRDCC have also been show....
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.... juridical persons. Therefore, there is nothing strange in the notion of the State acting through a corporation and making it an agency or instrumentality of the State." 17. For identifying such an agency or instrumentality he propounded four indicia: (1) "A finding of the State financial support plus an unusual degree of control over the management and policies might lead one to characterize an operation as State action." (SCC p. 454, para 96) (2) "Another factor which might be considered is whether the operation is an important public function." (SCC p. 454, para 97) (3) "The combination of State aid and the furnishing of an important public service may result in a conclusion that the operation should be classified as a State agency. If a given function is of such public importance and so closely related to governmental functions as to be classified as a governmental agency, then even the presence or absence of State financial aid might be irrelevant in making a finding of State action. If the function does not fall within such a description, then mere addition of State money would not influence the conclusion." (SCC p. 454, para 97) (....
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....provides that the rates quoted by the Contractor shall be deemed to be inclusive of the GST at the time of payment to be borne by the Contractor. Clause 45.1 of the Contract Agreement is quoted as under:- "45.1 The rates quoted by the Contractor shall be deemed to be inclusive of the GST, income tax, service tax, royalty, labour cess, or any other tax/duty/cess as applicable be law at the time of payment, shall be borne by the contractor for the performance of this Contract. The Employer will perform such duties in regard to the deduction of such taxes at source as per applicable law." On perusal of the said clause, the Court finds that there is omission as regards the revision of tax rates during commencement of the work and its effect. 28. Clause 47 read with Clause 47.1 of the Contract Agreement provides for price adjustment in forming the work, which are quoted as under:- "47. Price Adjustment: 47.1. Contract price shall be adjusted for increase or decrease in rates and price of labour, materials, fuels and lubricants in accordance with the following principles and procedures and as per formula given in the contract data: (a) The price ....
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....incorporated in the contract shall not be accounted for this purpose. Such increase including GST shall not be made in the extended period of contract for which the contractor alone is responsible for delay as determined by authority for extension of time." By Order, Sd/- (Vimal Kumar Gupta) Joint Secretary to the Government The Court feels that this provision has been inserted to overcome the difficulties which arose because of the omission in the contract agreement as regards the variation in tax rates during commencement of work by a contractor and its effect. 30. It is the submission of the Senior Counsel appearing for the petitioner that since the order dated 07.01.2021 has been issued by the Finance Department, Government of Rajasthan, under the orders of His Excellency, the Governor of Rajasthan, so as to make amendments in the Public Works and Financial Accounts Rules Part-2. Once the Court has already held that the RSRDCC being a Government of Rajasthan Undertaking and other factors as discussed in the foregoing paras of this order has held that all the orders issued on powers being by His Excellency the Governor of Rajasthan and the provisions o....
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.... Tax are increased or decreased in case of performance of a contract, an equitable adjustment of the Contract price shall be made to fully take into account any such change by addition to the Contract Price or deduction there from, as the case may be. The variation in the GST rates came in existence during the course of performance of the contract by the petitioner which was assigned to him by the respondent-Company. The language of the order dated 07.01.2021 clearly speaks that if there is any variation in the GST rates, the effect arising from the variation would be applicable to the contractors whose work at the relevant time was in progress and not completed. In the present case, as per the facts on record, the work which was assigned to the present petitioner by the respondent-Company commenced on 11.11.2021 which completed on 10.02.2023 and the GST rates were revised vide Notification dated 31.12.2021 w.e.f. 01.1.2022. In the light of the aforesaid facts, this Court can safely held that the petitioner is entitled for the benefits which accrue under the order dated 07.01.2021 as like the benefits which have been extended by the Rajasthan Housing Board, a Government of Rajastha....
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....sition for the purpose of National Highways slows down as a result of award of solatium and interest. Thus, a classification made between different sets of landowners whose lands happen to be acquired for the purpose of National Highways and landowners whose lands are acquired for other public purposes has no rational relation to the object sought to be achieved by the Amendment Act i.e. speedy acquisition of lands for the purpose of National Highways. On this ground alone, the Amendment Act falls foul of Article 14. 30. Even otherwise, in P. Vajravelu Mudaliar [P. Vajravelu Mudaliar v. LAO, (1965) 1 SCR 614 : AIR 1965 SC 1017], despite the fact that the object of the Amendment Act was to acquire lands for housing schemes at a low price, yet the Amendment Act was struck down when it provided for solatium @ 5% instead of 15%, that was provided in the Land Acquisition Act, the Court holding that whether adjacent lands of the same quality and value are acquired for a housing scheme or some other public purpose such as a hospital is a differentiation between two sets of landowners having no reasonable relation to the object sought to be achieved. More pertinently, another exam....