TMI Blog2019 (4) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the agreed alternative forum of arbitration. There has been no novation of contract between the parties after July 1, 2012 with regard to variation of rates for the services rendered by the petitioner-contractor nor apparently the respondent-railway has agreed to bear the additional tax liability in the form of service tax after its imposition by the amendment of law with effect from July 1, 2012. This court respectfully cannot adopt the said view of the Delhi High Court in the case of GOVT OF NCT OF DELHI VERSUS MBL INFRASTRUCTURE LTD. [2012 (3) TMI 437 - DELHI HIGH COURT], in the present case as the terms of the contract are different and rates quoted are inclusive of all taxes and moreover the parties to the contract should have a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable and exigible to the service tax with effect from July 1, 2012 and the services of wet washing of bed rolls provided to the passengers in the trains, became taxable in the hands of the petitioner-contractor only with effect from July 1, 2012, which it paid to Union of India but since the contract with the respondent-railway was entered into prior to that date, the respondent-railway ought to have agreed to bear the said service tax liability in addition to the rates quoted by the petitioner-contractor for the said services. 3. He submitted before the court that the correspondence with the respondent-railway in this regard ended in negative against the petitioner-contractor. He drew the attention of the court towards the respons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, shall be included in the rates, prices and total bid price submitted by the bidder.' (emphasis supplied) 3.4 A reading of the aforesaid clause clearly indicates that the respondent is required to factor in all duties, taxes, royalties and other levies which were in force 'under applicable laws' or 'for any other cause' at a point in time, when parties had entered into a contract. The last part of the said clause makes that abundantly clear, by stating that the rates, prices and total bid price shall include all duties, taxes, royalties, etc., payable by the bidder under the contract either 'under applicable laws' or 'for any other cause'. It cannot be said that service tax, which, admittedly was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s side but admittedly no effort has been made in the present case to take the matter to the arbitration at all. 7. On the last occasion on September 17, 2018 after hearing the learned counsels, this court passed the following order : 1. The question raised by the petitioner-company in this petition is, as to whether the liability to pay and reimburse the service tax becoming chargeable after 2012 amendment of law, can be passed on by the petitioner-contractor to the awarder of the contract, i.e., South Western Railways and the said imposition of service tax can be recovered from the railways or not by the present petitioner-contractor, who undertook the contract during the relevant period for washing of linen in the coaches of trains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gues that the 'rates' quoted for such contract of washing of linen was inclusive of applicable taxes and therefore, such service tax are not separately payable by the railways in the present case under the existing contract. 5. The learned counsel for the respondent Mr. N. S. Sanjay Gowda also contends that the fares charged from the passengers in the trains includes the costs of washing of linen also and therefore, the service tax component thereof already stood paid by the railways as collected from passengers as a part of the fare. However, no separate details of that bifurcation of fare and service tax from the passengers is placed on record and merely, an averment is said to have been made in the statement of objections file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012 with regard to variation of rates for the services rendered by the petitioner-contractor nor apparently the respondent-railway has agreed to bear the additional tax liability in the form of service tax after its imposition by the amendment of law with effect from July 1, 2012. Within the given framework of existing contract terms between the parties, no such mandamus direction, as prayed for in the present writ petitions, can be given by this court as there is no question of any arbitrariness or illegality committed by the respondent-railway while denying their liability to bear the additional service tax liability raised by the petitioner-contractor. 10. The decision of the Delhi High Court relied upon by the learned counsel for th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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