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2020 (5) TMI 267 - HC - Service TaxDeduction of service tax from the amount payment (consideration) as per the contract terms - scope of the terms of agreement - services of lifting/collecting of municipal solid waste/garbage/malba/drain silt etc. and dumping the same to nearby designated site - appellant claims that consideration payable gets reduced on the ground that the petitioner was liable to pay service tax under the contract but was exempted - HELD THAT:- The agreed rate was of ₹ 1934/- per day per vehicle for eight hours of working. The rate was all inclusive including service tax, labour cess, accident claims etc. Escalation on the awarded rate was allowed in case of increase /decrease in fuel and minimum wages as stipulated only - The important thing that follows is that the aforesaid rate is all inclusive. It is subject to increase/decrease only in case of variation of fuel rates and minimum wages. There is no stipulation that in case service tax, insurance, registration charges, parking charges, etc. are varied, the charges payable will be increased/decreased. It is manifest that there is no stipulation in the agreement that the charges are in any manner linked with the service tax. In fact, there is nothing in the contract that even specifies what rate of the service tax is allegedly payable. The respondent is needlessly adding words to the agreement to try and justify the deductions for alleged nonpayment of service tax. In view the conduct of the parties, it is clear that the parties did not envisage deduction in the agreed rate from alleged service tax payment. The agreed rate was understood by the parties to be all inclusive and the same would bind the parties. Recovery of money - case of respondent is that petitioner was obliged to file a suit for recovery - HELD THAT:- Where facts are not in dispute and where the collection of money was without authorities of law, a reference may be ordered. Hence, normally a writ petition would not lie for recovery of money. However, depending on the facts and circumstances of a case, the power to direct refund can be exercised sparingly. In my opinion the facts of this case warrant exercise of this power to direct the respondent to release amounts wrongly withheld for a non-existing service tax. The petitioner was the lowest bidder at ₹ 1972/- per vehicle per day. This amount after negotiations was reduced to ₹ 1934/- per day. When the tender was floated on 15.03.2012 or when the negotiation of rates took place or on 02.06.2012 when the work order was issued or on 27.08.2012 when the Agreement was executed, there was no service tax leviable on Service of Waste Collection or disposal - Simply because the existing position was re-interacted by the State by issue of a notification dated 20.06.2012 did not warrant the act of the respondent to in 2015 claim refund of payments already made on the plea that the petitioner is wrongly being paid an amount for service tax. The respondent has acted in a grossly arbitrary manner and cannot justify withholding the said amount. The respondent have acted illegally, wrongly and malafidely withholding the amount on the alleged ground that service tax is not applicable to the agreed rate. A writ is issued to the respondent directing release all pending payments to the petitioner deducted on the ground of non-payment of service tax - Petition disposed off.
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