TaxTMI 
TaxTMI 
2026 (7) TMI 1050
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....writ petitioner within a period of three (3) weeks from the date of receipt of a copy of the impugned order. 2. The Contractor/writ petitioner has challenged the same impugned order by way of W.A. No.906 of 2025 to the extent of the learned Single Judge granting liberty to the Government to proceed with an enquiry pursuant to a Notice dated 26.04.2024 issued by the Executive Engineer, Irrigation Division No.3, Nagarkurnool. 3. Since both the Writ Appeals consist of the same parties who are assailing the same order dated 20.01.2025 passed by the learned Single Judge of this Court, both the Writ Appeals are being disposed of by this Common Judgment. 4. The Contractor/writ petitioner is a Company engaged in the infrastructure business and participated in a tender floated by the appellants/State for the execution of the Stage III pumping station (5X30 MW) of the Kalwakurthy Lift Irrigation Scheme, Gudipalli Gattu Balancing Reservoir. The Contractor/writ petitioner emerged as the successful bidder and deposited Rs.10 crores towards the security deposit in the form of a bank guarantee in terms of Clause 1.44 of the General Terms and Conditions. The contract was an Engineering, P....
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.... appellants/State should be entitled to withhold the security deposit of Rs.10 crores, are as follows. 08.01.2004 The Ministry of Finance, Government of India, issued Notifications exempting Central Excise Tax (No.3/2004 C.E) and Customs Duty (No.14/2004 Customs) on the imported electro-mechanical equipment used for water supply project w.e.f. 09.01.2004. 12.01.2005 The State Government issued the subject tender notification. The tender document indicated the lump sum estimated value of the work. 28.09.2005 The tender acceptance document (No.10/EPC/MGJLIP/2005) indicated the lump sum estimated value and accepted bid value. 19.08.2018 Execution of the Contract/work was completed. 21.08.2021 Operation and Maintenance period (O & M Period) of the Contract/work was completed. 29.07.2022 Work completion Certificate was issued by the Engineer (Lr.No.EE/Irrg/Dn.No.3/Ngkl/lift.3/DB). 26.08.2023 Contractor/writ petitioner requested for release of Bank Guarantee amount since the one-year period inclusive of the O & M Period has expired by 21.08.2021. 24.11.2023 The Superintending Engineer replied to the said request stating that the Bank Guaran....
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....ms clearance, etc. into account for calculating their bid price. The letter further alleged that the Contractor/writ petitioner had quoted a price which was inclusive of all taxes and duties and that no break-up had been furnished on such taxes. 16. On 18.07.2024, the Office of the Accountant General (Audit) in its letter to the Executive Engineer, Irrigation Division No.3, Nagarkurnool, stated that there are no paras/objections pending against such work with the Public Accounts Committee. 17. On 31.07.2024, the Accountant General (Audit) addressed a letter to the Project Engineer about the unintended benefit accruing to the Contractor/writ petitioner by reason of the inclusion of Central Excise Duty in the estimate of the bid price. The amount of the unintended benefit was quantified at Rs.4,428.59 lakhs. The Contractor/writ petitioner duly submitted an explanation to the said letter on 14.08.2024. 18. On 18.12.2024, the Executive Engineer, once again, issued a demand to the Contractor/writ petitioner to remit the sum of Rs.23,93,25,000/-. 19. The relevant dates indicate that the allegation of the Contractor/writ petitioner having taken the unintended benefit with rega....
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....use 1.25 which clearly mentions excise duties etc., should not have been part of the bid document at all since the bid document was floated on 12.01.2005, after almost one year from the exemption Notification issued by the Central Government on 08.01.2004. 22. The relevant figures in the tender document and in the tender acceptance document do not show any break-up in relation to the exemption Notification. It is pertinent to mention that the appellants/State accepted the Contractor/writ petitioner's bid from between two bidders as it was the more competitive of the two. Moreover, Annexure-K of the tender document ('Details of Equipment to be covered in the Scope of Supply') required the Contractor/writ petitioner to furnish specifications of all the materials and equipment to be used for the work/Contract. Significantly, Annexure-K does not require the value of each item to be mentioned. 23. It is thus evident that the appellants/State is seeking to question and dispute the contractual value by disputing the lump sum value indicated by it and to rectify its own mistake in calculating the estimated value (internal benchmarking) of the work/Contract. 24. The documents on re....
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....al Excise Duty on electro-mechanical equipment. 31. On 18.12.2024, the Executive Engineer issued a letter to the Contractor/writ petitioner for remitting the sum of Rs.23,93,25,000/-consequent to the letter of the Accountant General of 31.07.2024. The letter issued by the appellants/State on 18.12.2024 forms the basis of the challenge in Writ Petition. 32. The above sequence makes it evident that, not only is the allegation of unintended benefit a belated attempt to invent a charge post the Writ Petition but, it is also an attempt on the part of the appellants/State to shift the consequence of its own error onto the Contractor/writ petitioner. The turnaround on the part of the Accountant General (Audit) in reviving the charge of unintended benefit after giving a clean chit to the Contractor/writ petitioner on 18.07.2024 smacks of arbitrary and unreasonable conduct. 33. The sequence of events shows that the appellants/State sought to invent new charges and resurrect closed ones solely for the purpose of avoiding the refund of the security deposit to the Contractor/writ petitioner. 34. The learned Single Judge rightly allowed the Writ Petition by holding that the appellan....