TMI Blog2023 (7) TMI 1292X X X X Extracts X X X X X X X X Extracts X X X X ..... ransactions in totality under the contract, going by the plain words. The intentions of the parties to reimburse/pay and receive the impact of GST on direct transactions and also indirect transactions (bought out items) is clear from the deletion of portions from Clause 10.7 of GCC which restricted reimbursement of GST only to direct transactions. After deletion of the said portion, the word affected transactions and in totality and equitable adjustment has to be interpreted in the context of amended Clause 10.7. It is evident that the portions of the original Clause 10.7 which carved out an exception to indirect transactions (bought out items) for non-reimbursement of GST, is deleted and is no more part of the agreed terms of the contract. The Clause 31 of the GCC cannot be read in such a manner to bring back what is deleted by the parties as per agreed terms and do violence with amended Clause 10.7, Pre-bid clarification and Clause 28 of LOA. The Clause 31 of the GCC has be to be read in the context of amended Clause 10.7 Pre-bid clarification and Clause 28 of LOA and in light of clear intention of the parties to delete the portion which barred reimbursement impact of GST on i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e State within the meaning of Article-12 of the Constitution of India and hence are maintainable. Now the law is no more res integra, even in contractual matters the writs would maintainable against the Government or instrumentality or agencies of the Government. Even in cases of money claim writ against State within the meaning of Article 12 of the Constitution of India would be maintainable. In the case at hand, the acts and actions of the Respondents are in derogation to the Article 14, 19(1)(g), 21 and 300A of the Constitution of India. The respondents were not justified in withholding the amount of GST impact and the same is arbitrary, violative and against their own terms of agreement - in view of introduction of GST during the continuance of the ongoing contract, the liability to pay GST shall be that of the Respondent JBVNL in terms of the amended work order incorporating the impact of GST - the matter is remitted back to the Respondent JBVNL to calculate and pay the withheld amount which has been deducted from various bills of the petitioner since September, 2019 till the date of actual payment as the petitioner is entitled for reimbursement of GST along with statutor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, order or direction, holding and declaring that the Petitioner is entitled for reimbursement of GST due to the fact that Respondent have deposited TDS on CGST and SGST @ 1% each of gross value of GST invoice from the date of applicability i.e. from 01/09/2018. 3. The petitioner had preferred above referred four separate writ applications. However, since the issue is common; hence the facts enumerated in W.P.(T) No. 4885 of 2022 has been made the basis for the entire factual narration. The facts of the case lie in a narrow compass. A tender was floated by the Respondent no. 2-Jharkhand Bijli Vitran Nigam Limited (JBVNL) for the electrification of rural areas, which was to be implemented in terms of a scheme floated by the Central Government namely Deen Dayal Upadhyay Gramin Jyoti Yojna (DDUGJY). The scheme was such that 60% of the project was to be funded by Rural Electrification Corporation Limited (REC), 30% of the sanctioned cost was to be funded as loan by the Project Implementing Agency (PIA/licensee) and 10% is to be funded by the respective State Governments across the nation. Before enactment of Good Services Tax Act, the licensee floated Notice Inviting Tender and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Clause 10.7 read as under: For the purpose of the Contract, it is agreed that the Contract Price specified in Article 2(Contract Price and Terms of Payment) of the Contract Agreement is based on the taxes, duties, levies and charges prevailing at the date seven (07) days prior to the last date of bid submission (hereinafter called Tax in this GCC Sub-clause 10.7). If any rates of Tax are increased or decreased, a new Tax is introduced, an existing Tax is abolished, or any change in interpretation or application of any Tax occurs in the course of the performance of the Contract, which was or will be assessed on the Contractor in connection with performance of the Contract, an equitable adjustment of the Contract price shall be made to fully take into account any such change by addition to the Contract price or deduction therefrom, as the case may be, in accordance with GCC Clause 31 (Changes in Laws and Regulations) hereof. In the event of introduction of GST in the course of performance of contract, PIA shall examine its impact on the affected transactions under the contract in totality, for equitable adjustment in the contract price, if required. The contractor shall furnis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake into account any such change by addition to the contract price or deduction therefrom, as the case may be in accordance with GCC. Clause 31 (change in Laws and Regulations) hereof. In the event of introduction of GST in the course of performance of contract, PIA shall examine its impact on the affected transactions under the contract in totality for equitable adjustment in the contract price, if required. The contractor shall furnish the relevant details/documents for this purpose, as may be required by PIA. 5. The case of the petitioner is that there was no confusion till the letter of award was issued, inasmuch as, the Letter of Award was issued pre-enactment of GST. However, after introduction of GST Act, since the contract so awarded, also borne the approval of Board of Directors of the licensee dated 21.04.2017, the petitioner made its claim of impact of GST and based upon the same, the amended work orders were also issued, taking into consideration the impact of GST and the licensee had been paying the same until August 2019. Suddenly, from September 2019, the licensee stopped making payment of the impacted transactions of GST and in fact started recovering the enhan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondent. The Respondent has deposited TDS on CGST and SGST @ 1% each of gross value of GST invoice from the date of applicability i.e. from 01-09-2018. He further submits that the respondent also issued a performance certificate to the petitioner indicating that the work was completed to the satisfaction of the respondent and Work Completion Certificates were issued on 17- 08-2021 for Ramgarh district, on 17-12-2021 for Dhanbad district, on 20-12-2021 for Bokaro district and on 01-01-2022 for Chatra district. Further, as per the agreed terms, after introduction of GST, the respondent No. 2 started paying /reimbursing amounts of GST impact on affected transactions in totality i.e., direct transactions between Employer and Contractors as well as indirect transactions (bought out items) which continued up to August, 2019 i.e., up till execution of 80% of the work. Learned sr. counsel contended that this action shows understanding and conduct of the respondent No. 2 of the said amended Clause 10.7. He further submits that the respondent No. 2 never informed petitioner till date the reasons for withholding of GST amount or that they are releasing GST payment as indirect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Writ in contractual matters against public authority or instrumentality or agencies of State are maintainable. 8. Mr. Sachin Kumar, learned Sr. S.C. appearing on behalf of the JBVNL relying upon several paragraphs of the counter-affidavit submits as under: (i) The ADDENDUMM OF 10.7 in Pre-Bid Meeting shall be interpreted with GCC clause 31 which is part of above addendum (Para 8,9,10 of Counter Affidavit). (ii) In the REC Letter dated 30-06-2016 [Para 10(i) of Counter Affidavit] the aforesaid stipulations were only re- iterated. Perusal of the above stipulations/documents do not reveal any sort of contradiction amongst them. In fact, both the clauses are seen supporting and complementing each other, which have been just re-iterated in the REC'S Letter. (iii) Relying further upon Para 10(v) of the Counter Affidavit it has been further submitted that on cited clause, REC clarifications and opinion of consultant and State Government it is clear cut that GST impact shall be provided on direct transactions only. Learned counsel submits that after analyzing the documents submitted by the M/S T Techno Electric Engg. Co. in pursuance of letter No 2638/RE date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ricted reimbursement of GST only to direct transactions. After deletion of the said portion, the word affected transactions and in totality and equitable adjustment has to be interpreted in the context of amended Clause 10.7. It is not a case of the respondent No. 2 that the indirect transactions (bought out items) are not affected transactions nor it is the case of the respondent No. 2 that there is no impact of GST on the said indirect transactions or that it does not come within the totality of the contract and adjustment of such cost would not equitable. A plain reading of amended Clause 10.7 shows that the GST impact is payable on all affected transactions considered in totality without any exception to indirect transactions. It is evident that the portions of the original Clause 10.7 which carved out an exception to indirect transactions (bought out items) for non-reimbursement of GST, is deleted and is no more part of the agreed terms of the contract. The Clause 31 of the GCC cannot be read in such a manner to bring back what is deleted by the parties as per agreed terms and do violence with amended Clause 10.7, Pre-bid clarification and Clause 28 of LOA. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Contract Agreement dated 19-06-2017 under Article 1. In the case of Transmission Corporation of Andhra Pradesh Ltd. Vs. GMR Vemagiri Power Generation Ltd. reported in (2018) 3 SCC 716 it is held by the Hon ble Supreme Court that in the event of any ambiguity arising the terms of the contract will have to be interpreted by taking into consideration all surrounding fact and circumstances including correspondence exchanged, to arrive at the real intendment of the parties, and not what one of the party may contend subsequently what to have been intended. It is further held that there is no need to inquire whether their particular interpretation is correct or not or whether they were mistaken or not or whether they had in mind the original term or not suffice that they have, in their course of dealing, put their own interpretation in their contract, and cannot be allowed to go back. 11. From the Pre-bid Clarification dated 06-09-2016 and the Clause 28 of Letter of Award dated 09-06-2017 the intentions of the parties are clear that in the event of introduction of GST in the course of performance of contract, PIA shall examine its impact on the affected transactions under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition in view of the pre-bid meeting and clarification, now at this stage, the licensee cannot take a U-Turn by not paying the GST impact. At this stage it is relevant to observe that as per the agreed terms, after introduction of GST, the Respondent No. 2 started paying /reimbursing amounts of GST impact on affected transactions in totality i.e., direct transactions between Employer and Contractor as well as indirect transactions (bought out items) which continued up to August, 2019, up till execution of 80% of the work. However, all of a sudden, without even informing the petitioner, withheld amount of GST impact while paying bills from the month of September, 2019 and also started recovering the same. As a matter of fact, the Respondent No. 2 never informed Petitioner till date the reasons for withholding of GST amount or that they are releasing GST payment as indirect transactions/bought out item provisionally. 13. The contention of the Respondent No. 2 that the GST was reimbursed as indirect transaction provisionally is extraneous and does not bear out from the agreed terms but the Respondent No. 2 remained silent. In the case of Mahabir Auto Stores Vs Indian Oil Cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 2 under Para 10(i) of the Counter Affidavit has accepted that stipulations/documents do not reveal any sort of contradiction amongst them. In fact, both the clauses are seen supporting and complementing each other, which have been just re-iterated in the REC'S Letter dated 30-06-2016. 15. With regard to the contention of the Respondents on the question of maintainability; now it is well settled that the writ in contractual matters against public authority or instrumentality or agencies of state are State within the meaning of Article-12 of the Constitution of India and hence are maintainable. Now the law is no more res integra, even in contractual matters the writs would maintainable against the Government or instrumentality or agencies of the Government. Even in cases of money claim writ against State within the meaning of Article 12 of the Constitution of India would be maintainable. In the case at hand, the acts and actions of the Respondents are in derogation to the Article 14, 19(1)(g), 21 and 300A of the Constitution of India. In the case of UOI Vs. Tantia Construction Pvt. Ltd reported in (2011) 5 SCC 697 it is held by the Hon ble Supreme Court that writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntractual obligation, would not relieve the State of its obligation to comply with the basic requirement of Article 14. An additional contractual obligation cannot direct the claimant of the guarantee under Article 14 of the non-arbitrariness at the hands of the State in any of its action. Every State action in order to survive, must be susceptible to the vice of arbitrariness which is crux of Article 14 and basic to the rule of law, the system which governs us. Arbitrariness is the very negation of rule of law. Satisfaction of test of non-arbitrariness in every State action is sine qua non to its validity and in this respect the State cannot claim comparison of with private individual even in the field of contract Arbitrariness is anathema to State action in every sphere and wherever the vice percolates, the Court would not be impeded by technicalities to trace it and strike it down. This is the surest way to ensure the majesty of rule of law guaranteed by the Constitution of India. Every State action must be informed by reasons and it follows that an out uninformed by reason, is arbitrary. The same view was reiterated by the Hon ble Apex Court in the case of Food Corporation of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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