TaxTMI 
TaxTMI 
2026 (7) TMI 992
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....f clause 11 of the work order 19 & 20 dated 09.01.2009 as NIT is not an offer but invitation to offer and, without taking note of qualifying lines of 64A of Sales of Goods Act. iii. For a consequential relief for refund of Rs. 18,49,682/- which has been retained by the Respondent as unjust enrichment by misuse of authority. 2. The fact of the case is that the petitioner is a partnership firm which was awarded the work of renovation and augmentation etc of the Katras 10th APDRP Projects after being declared the lowest bidder (L1) in the tender process. Work Orders No. 19 and 20 dated 09.01.2009 fixed the rates for supply of materials, and the rates were inclusive of excise duty and other taxes. The work orders clearly stated that the prices were firm and would not be changed during the contract period. During the execution of the work, the rate of excise duty was reduced from 8% to 6%. On this basis, the respondents deducted Rs. 18,49,682/- from the petitioner's bills while making payment. The petitioner repeatedly requested the respondents to refund the deducted amount, but no action was taken. 3. Learned counsel for the petitioner submitted that the Clause 11 of the....
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....at the price is firm and shall not be subject to any escalation whatsoever within contractual completion period in terms of Clause 11 of the Work Orders dated 09.01.2009 and as per Section 64A of the Sales of Goods Act and unless different intention appears from the terms of contract, no deduction can be done on account of reduction in of excise duty. For appreciating the matter, relevant conditions contained in Clauses of Work Order, NIT and contract agreement are need to be looked into. 6. Clause 9, 11 & 31 of the Work Order No.19 dated 09.01.2009 is extracted as hereunder: "Clause 9: Taxes & Duties The unit cost of individual items includes all applicable taxes & duties. Clause 11: UNIT PRICE FOR MATERIALS The unit price indicated in the BOQ shall include the prices of materials including all individual charges for transport, loading, unloading and handling of materials, commission for arranging dispatch by rail/road, direct from manufacturer factory & completing all necessary formalities in this respect such as submission of forwarding notes, collection of JSEB receipts, all insurance premium, bank charges for bank guarantee, indemnity bon....
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....t the Contractor/Supplier agrees to execute the work and deliver the materials in conformity with the provisions of the general conditions of NIT. "And the Contractor has agreed to execute the said work in accordance with Jharkhand State Electricity Board's notice inviting Tender No. 581/PR/JSEB/2006-07 general conditions of tenders and the bill of quantity. The Contractor/Supplier agrees to execute the above work and deliver the above said materials conformity with the provisions of the general conditions of NIT and other documents referred to above which forms part of this contract within 12 (Twelve) months from execution of this contract." 11. It is also well-settled that every contract is to be construed with reference to its object and the whole of its terms and the whole context must be considered to ascertain the intention of the parties. In Provash Chandra Dalui v. Biswanath Banerjee, 1989 Supp (1) SCC 487 at page 495 the Hon'ble Supreme Court observed as under: 10. 'Ex praecedentibus et consequentibus optima fit interpretatio.' The best interpretation is made from the context. Every contract is to be construed with reference to its object ....
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....ed. If the SPC decides in favour of extension of contract period then the issue of LD will also be decided accordingly. Also responsibility may be fixed for delay of about 7 years in taking decision on this important matter. The clause no. 4.2.1.1(i) (Excise Duty) of NIT No. 303/PR/JSEB/2006-07 for Jamtara town states that "If the Excise Duty is reduced below the prevailing rates, the purchaser shall be entitled to get reimbursement from the contractor". Similarly, the clause 1.3.2015 (a) of NIT No. 581/PR/JSEB/2006-07 for Katras Town states that "Statutory variation (Tax, Duties, etc.): Any statutory variation in taxes and duties will be reimbursed on actual on production of documentary evidence." Hence as per terms of NIT, any variation in excise rate will have impact on the invoices raised by the contractor. Variation in the excise rate clause was applicable on either party and obviously contractor cannot demand higher excise rate even when rate was reduced. He has been paid excise duty already as per the then prevailing rate. The Excise deduction is due to decrease in Excise rates and hence claim of petitioner is not tenable and thus rejected....
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....rse" has been defined in Oxford Advanced Learner's Dictionary, 10th Edition, at Page No.1303, as follows:- "To pay back money to somebody which they have spent or lost" The word "re-imbursement", means re-imbursing the persons who has sustained the loss. That means the amount of loss has to be make good by the other person, to the person who has sustained the loss. 20. In this case, the situation is different. No-one has sustained loss due to the variation of the excise duty, rather the excise duty was decreased which resulted in increase in revenue of the petitioner. 21. Be it noted that the price included the tax component and the petitioner offered his price which definitely included his cost component, profit and tax. 22. Now by downward variation of the excise duty, the liability of tax which the petitioner had to pay to the Government Exchequer had decreased. His profit component and the cost of the material remain unchanged. By downward variation of the excise duty, the petitioner will earn some more amount. 23. As per the Clause when a price includes the tax component, the tax is supposed to be paid by the respondent. This amount of tax goes to the corp....