TMI Blog1996 (8) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... 10774 of 1996, - - - Dated:- 20-8-1996 - JEEVAN REDDY B.P. AND PARIPOORNAN K.S. JJ. A.K. Ganguli, Senior Advocate (Sudhir Chandra, Arvind Varma and Ms. Suruchi Aggarwal, Advocates, with him), for the respondent. Rakesh Dwivedi, Additional Advocate-General for the State of U.P. (R.B. Misra, Sudhansu and Kamalendu Misra, Advocates, with him), for the appellants. -------------------------------------------------- The judgment of the Court was delivered by B.P. JEEVAN REDDY, J.- Leave granted. This appeal is directed against the judgment of a Division Bench of the Allahabad High Court disposing of the writ petition filed by the respondent with certain directions. The arguments before us ranged far and wide and several questions have been raised though none of them are reflected in the judgment under appeal. It is averred that all these contentions were indeed urged before the High Court. Be that as it may, having regard to the importance of the questions raised herein, which is said to be arising in that court frequently, it has become necessary to refer to the contentions urged. The respondent-Bridge Roof Company (India) Limited-is a public sector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the employer's country on profits made by him in respect of the contract". Clause 70 of the contract provided for price adjustment. It would be sufficient if we notice sub- clause (4) of the said clause (quoted at page 47 of the paper-book). It reads: "(4) If, after the date thirty days prior to the date of opening of tenders for the works, there in India, changes to any National or State statute, ordinance, decree or other law or any regulation or bye-law of any local or other duly constituted authority, or the introduction of any such State statute, ordinance, decree, law, regulation or bye-law which causes additional or reduced cost of the contract, other than under sub-clauses (1a), (2) and (3) of this clause, in the executing of the works, such additional or reduced cost shall be certified by the engineer after examining the records provided by the claimant and shall be paid by or credited to the employer and the contract price adjusted accordingly. Notwithstanding the foreign input, such additional or reduced cost shall not be separately paid or credited if the same shall already have been taken into an account in the indexing of any input to the price adjustment formula in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son responsible for making payment to any dealer/contractor shall deduct, at the time of making payment to the contractor, a sum equal to 4 per cent of the sum mentioned therein. The proviso to sub-section (1) inserted by U.P. Amendment Act 28 of 1991, with effect from February 19, 1991, empowers the Commissioner to direct that the deduction provided by sub-section (1) shall be made at such lesser rate as may be specified in the order made by him or that no such deduction shall be made. Section 8-D further provides that the amount so deducted shall be remitted to the Government and shall be treated as tax paid by the contractor/dealer. Any failure to deduct the amount as provided by sub-section (1) makes the person (responsible for deducting) liable to pay the said amount. He is also liable to pay such penalties as may be imposed for his failure to deduct and/or remit. It would be appropriate to read sub-section (1) of section 8-D along with its proviso: "8-D. Tax deduction from the amount payable to works contractor.-(1) Notwithstanding anything contained in sub-section (2) of section 8-A, every person responsible for making payment to any dealer (hereinafter in this s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 44-RA Bill dated May 20, 1995/July 31, 1995 (annexure 4) of the petitioner-company." After setting out the relevant facts, the respondent contended in the said writ petition that the proposed deduction of the sum of Rs. 82,24,969 from the petitioner's bills, purporting to act under clause 70(4) of the contract is misconceived and untenable because the rate of sales tax has not been reduced in the present case as contemplated by clause 70(4), but that only the rate of deduction at source has been reduced. The respondent's case was that the change in the rate of deduction at source or the composition of the respondent's liability to pay tax under section 7-D is of no concern to the Government. The Government must deduct only one per cent up to March 31, 1995 as directed in the order dated May 27, 1992 and leave the rest to the respondent and the sales tax authorities. The respondents in the writ petition (appellants herein) filed a counter disputing the several contentions raised in the writ petition and justifying the retention of the sum of Rs. 82,24,969. According to appellants, the said amount need not be paid to the sales tax department also. By virtue of the composition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous. But that order is being construed by the respondent an order allowing the writ petition as prayed for. If so understood, the order of the High Court results in unjust enrichment of the respondent at the cost of public exchequer besides being contrary to the provisions of the statute and terms of the contract between the parties. Shri A.K. Ganguli and Mr. Sudhir Chandra, learned advocates of the respondent, on the other hand, submitted that the Government is not concerned with the sales tax liability of the respondent. That is a matter between the respondent and the sales tax department. The obligation of the Government under the contract was only to deduct 4 per cent from the amount payable to the respondent under the contract. But since the said obligation to deduct has been reduced from 4 per cent to one per cent by an order made under the proviso to section 8-D(1), the Government should deduct only at the rate of one per cent and pay over the balance of the contract amount rest to the respondent. The Government is not concerned with the order of composition made under section 7-D(1). What all has happened under the composition order is that instead of ascertaining the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itated before the arbitrator or the civil court, as the case may be. If any amount is wrongly withheld by the Government, the remedy of the respondent is to raise a dispute as provided by the contract or to approach the civil court, as the case may be, according to law. Similarly if the Government says that any overpayment has been made to the respondent, its remedy also is the same. Accordingly, it must be held that the writ petition field by the respondent for the issuance of a writ of mandamus restraining the Government from deducting or withholding a particular sum, which according to the respondent is payable to it under the contract, was wholly misconceived and was not maintainable in law. [See the decision of this Court in Assistant Excise Commissioner v. Isaac Peter (1994) 4 SCC 104, where the law on the subject has been discussed fully.] The writ petition ought to have been dismissed on this ground alone. We must mention in this behalf that the order of composition of tax liability, if any, under section 7-D of the Act has not been placed before us. [We presume that it is an order separate from the order dated May 27, 1992. But, even if it is not, it makes no differenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extraordinary jurisdiction of the High Court under article 226. The existence of an effective alternative remedy-in this case, provided in the contract itself-is a good ground for the court to decline to exercise its extraordinary jurisdiction under article 226. The said article was not meant to supplant the existing remedies at law but only to supplement them in certain well- recognised situations. As pointed out above, the prayer for issuance of a writ of mandamus was wholly misconceived in this case since the respondent was not seeking to enforce any statutory right of theirs nor was it seeking to enforce any statutory obligation cast upon the appellants. Indeed, the very resort to article 226-whether for issuance of mandamus or any other writ, order or direction-was misconceived for the reasons mentioned supra. So far as the High Court's direction to deduct at the rate of one per cent is concerned, it may be a case of stating the obvious, as contended by the appellants. But it must also be realised that more than that could not have been legitimately granted in a writ petition. It must also be noticed that the declaration granted is effective only for a limited period, i.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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