2010 (3) TMI 734 - HC - Indian Laws

Demand - contractual amount may be reduced to 1/3rd and else the deposited amount may be returned to it - the tax slab had been reduced by the notification dated 08.07.2009 i.e. more than a month before issuance of the NIT; and appellant s own fault of not taking note of the prevalent rates cannot be taken as a ground in its favour - the appellant was misled by the respondents to believe and assume certain facts without proper disclosure of all the relevant facts; and the respondents cannot take advantage of their own wrong - The notification in relation to tax slab was issued as back as on 08.07.2009 whereas the NIT was issued on 19.08.2009 and the bids were opened as late as on 10.09.2009 - The suggestions about loss to the public exchequer are also baseless apart from being self-defeating - The appeal is dismissed

Issues:
1. Dismissal of writ petition related to a contractual matter.
2. Appellant's request for reduction of contract rate.
3. Rejection of appellant's representations.
4. Forfeiture of deposited amount.
5. Allegations of misleading conduct by the respondents.
6. Appellant's attempt to back out of the contract.
7. Observations of the Single Judge.
8. Appellant's appeal against the Single Judge's decision.

Analysis:
1. The appeal was directed against the dismissal of a writ petition by the Single Judge regarding a contractual matter. The appellant had bid the highest amount for a tax collection contract, but later sought a reduction in the contract rate due to a mistake in referencing old tax rates. The Single Judge found no grounds for interference, citing the reduction of tax slab before the bid and the appellant's failure to note the prevalent rates as reasons for dismissal.

2. The appellant's request for a reduction in the contract rate was based on a representation to the Commercial Taxes Officer, citing a mistake in the offered amount and the reduced tax rates. The representation was rejected by the respondents, leading to further rejections despite the appellant's attempts to justify the reduction request.

3. The rejection of the appellant's representations by the respondents ultimately led to a notice of default and potential forfeiture of the deposited amount. The appellant's subsequent communication regarding lack of awareness about reduced tax rates and inability to sign the contract was not accepted by the respondents, resulting in the initiation of forfeiture proceedings.

4. The issue of forfeiture of the deposited amount arose due to the appellant's failure to execute the contract and the subsequent rejection of representations. The Single Judge observed that the total sum received by the Government through forfeiture would exceed the amount for which the contract was awarded, justifying the forfeiture.

5. Allegations of misleading conduct by the respondents were raised by the appellant, claiming they were misled into bidding based on incomplete information. However, the court found these allegations baseless, noting that the appellant made the offer with full knowledge and cannot claim lack of disclosure as a defense.

6. The appellant's attempt to back out of the contract after realizing its non-viability was not accepted by the court, which deemed it a late attempt to avoid contractual obligations. The court held that the department was justified in rejecting the appellant's representations and enforcing forfeiture due to the default.

7. The observations of the Single Judge highlighted the sequence of events, the appellant's attempts to renegotiate the contract, and the implications of the default on the contract terms. The Single Judge correctly dismissed the writ petition, finding no valid grounds for intervention on behalf of the appellant.

8. The appellant's appeal against the Single Judge's decision was summarily dismissed by the High Court, upholding the Single Judge's findings and conclusions regarding the contractual matter and the appellant's actions throughout the process.

← Previous Next →