(Prayer in W.P.No.13357 of 2020: Writ Petition filed under Article 226 of the Constitution of India, praying for issuance of a Writ of Mandamus, directing the respondents herein to consider the representations of the petitioner dated 05.12.2017, 07.05.2019, 26.08.2019, 21.10.2019 and 16.03.2020 towards payment of GST and representations dated 13.08.2018, 07.05.2019, 05.07.2019, 21.10.2019 and 16.03.2020 towards Payment of Price Adjustment as provided under the Contract Agreement and the guidelines issued by the Govt of Tamil Nadu in G.O.Ms.No.296, Finance (Salaries) Department dated 09.10.2017 and further direct the respondents to pay the claims made by the petitioner herein arising out of Contract Agreement SWDC No.B4/0188/2015 – PWC No.3625A dated 15.12.2015 for the work of Construction of Integrated Storm Water Drains in Nandampakkam Watershed of Adyar Basin in expanded Areas of Greater Chennai Corporation – Package 35 with the respondents.)
1. The respondents had filed a Writ Appeal No.2814 of 2022 against the interim order passed by this Court on 17.09.2021. Meanwhile in the connected Writ Petitions arising out of similar contracts order came to passed in W.P.Nos.19906 and 19926 of 2022 on 05.08.2022.
2. Today, when the case was taken up for hearing, the learned counsel for the respondents submitted that the respondents have filed a memo to withdraw the Writ Appeal and are willing to abide by the orders dated 05.08.2022 in W.P.Nos.19906 and 19926 of 2022 in the present case also. Relevant portion of the order reads as under:
“ By this common order, both the writ petitions are being disposed.
2. The petitioner was awarded two contracts dated 15.12.2015 for construction of Integrated Storm Water Drains. The agreement was executed and signed on 15.12.2015 the orders were thereafter issued to the petitioner and also completed the work. The respondents have also issued the performance certificate to the petitioner.
3. It is the specific case of the petitioner that during the interregnum, the Goods and Service Tax Act, 2017 came into force with effect from 01.07.2017. At the time, when the agreement was signed, 2% VAT was payable under the provisions of the Tamil Nadu Value Added Tax, 2006. However, on account of implementation of VAT, the tax components had increased to 12%. The petitioner has also absorbed the tax and paid the amount to the Central Government and the State Government under the respective GST enactments of 2017.
4. It is the further case of the petitioner that in respect of two contracts dated 15.12.2015, the petitioner has raised a total invoice of Rs.22,33,34,296/- and Rs.11,55,26,771/- including GST components of Rs.2,68,00,112/- and Rs.1,38,63,211/-. It is the case of the petitioner that the petitioner is entitled for reimbursement of the tax in view of the clause 43.1 of the respective agreement dated 15.12.2015 and thus the petitioner is also entitled for price adjustment in terms of clause 44 and 45 of the said agreements.
5. It is submitted that the petitioner has been sending repeated reminders. However, these reminders have not been considered. The petitioner has also placed reliance of G.O.Ms.No.296 Finance (Salaries) Department dated 09.10.2017. In this connection a reference is made to para 10(b) of the said G.O.Ms.296 Finance (Salaries) Department which reads as under:-
“10(b).In case, the break up of taxes was not obtained or furnished in the bid document, the supplier may be asked to furnish break up of the taxes within the contracted amount, giving details and explanations and based on this estimate of total subsumed tax shall be arrived. For instance, if for the contracted amount of Rs.48 lakh in the example above, the supplier states that the Central Excise Duty is Rs.1 lakh and VAT or CGST is Rs.1 lakh, after checking the reasonability of his claim, the subsumed tax may be arrived at Rs.2 lakh.”
6. These writ petitions are opposed on the ground that there is no case made out for a mandamus. That apart, it is submitted that in a connected writ petition filed by few other contractors before this Court in W.P.Nos.13357, 13359, 13361, 13363, 13364 and 13365 of 2020 vide order dated 17.09.2021, an interim order came to be passed and directed the respondents to report compliance.
7. It is submitted that the learned Single Judge of this Court by the aforesaid order dated 17.09.2021 directed the Commissioner, The Greater Chennai Corporation/1st respondent herein to constitute a committee to gothrough the claim made by the petitioners therein and the materials that were submitted and to substantiate the claim and report was to be submitted before the 1st respondent. It is further submitted that the said order has been challenged before the Hon-ble Supreme Court and the issue is now pending.
8. I have considered the arguments advanced by the learned counsel for the petitioner and the learned counsel for the respondents.
9. The agreements which were signed by the petitioner and the respondents for package of 3 and 11 both dated 15.12.2015. They contemplate clauses pertaining to tax and the price adjustment. The relevant clauses read as under:-
“43.1. The rates quoted by the Contractor shall be deemed to be inclusive of the VAT, Sales and other taxes that the contractor will have to pay for the performance of this Contract. The Employer will perform such duties in regard to the deduction of such taxes at source (TDS) as per applicable law.
43.2. The project manager shall adjust the Contract Price if taxes, duties, and other levies are changed between the date 28 days before the submission of bids for the Contract and the date of the last completion certificate. The adjustment shall be the change in the amount of tax payable by the Contractor, provided such changes are not already reflected in the Contract Price.”
10. The fact of the matter is that the agreements were signed at the time, when Tamil Nadu Value Added Tax Act, 2006 was in force. The parties have factored 2% Vat under the provisions of the Tamil Nadu Value Added Tax, 2006. The nature of work carried out by the petitioner appears to be a work contract within the meaning of the Tamil Nadu Value Added Tax, 2006 as it stood then. Now under the provisions of the respective GST enactments of 2017, it is supply. Section 64A of the Sale of Goods Act, 1930 specifically deals with the situation in hand. It reads as under:-
“ 64A. In contracts of sale, amount of increased or deceased to tax to be added or deducted:~
(1) Unless a different intention appears from the terms of the contract, in the event of any tax of the nature described in sub-section (2) being imposed, increased, decreased or remitted in respect of any goods after the making of any contract for the sale or purchase of such goods without stipulations as to the payment of tax where tax was not chargeable at the time of the making of the contract, or for the sale or purchase of such good tax~ paid where tax was chargeable at that time.-
(a) if such imposition or increase so takes effect that the tax or increased tax, as the case may be, or any part of such tax is paid or is payable, the seller may add so much to the contract price as will be equivalent to the amount paid or payable in respect of such tax or increase of tax, and he shall be entitled to be paid and to sue for and recover such addition, and
(b) if such decrease or remission so takes effect that the decreased tax only, or no tax, as the case may be, is paid or is payable, the buyer made deduct so much from the contract price as will be equivalent to the decrease of tax or remitted tax, and he shall not be liable to pay, or be sued for, or in respect of, such deduction.
(2) The provisions of sub~section (1) apply to the following taxes, namely:-
(a) any duty of customs or excise on goods.
(b) any tax on the sale or purchase of goods.”
11. Under these circumstances, I am inclined to dispose this writ petition by directing the respondents to consider and pass orders on the petitioner-s representation dated 16.01.2018, 07.01.2019, 06.01.2020, 25.01.2022 and in the light of the provisions of the respective GST enactments of 2017 and after considering the requirement of G.O.Ms.No.296, Finance (Salaries) Department dated 09.10.2017 and in the light of the Section 64A of the Sale of Goods Act, 1930.
12. This exercise shall
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be carried out by the respondents after giving due notice to the petitioner to substantiate this case within a period of eight weeks from the date of receipt of a copy of this Order. It is made clear no views are expressed on merits of the claim of the petitioner and the petitioner is entitled to give additional representation to the respondents. 13. Accordingly, these writ petitions stand dismissed with the above observations. No costs.” 3. Considering the above, these Writ Petitions are disposed of by directing the petitioner to file fresh copy of the representation together with all documents to substantiate the claim within a period of thirty days from the date of receipt of a copy of this order. On receipt, the 1st respondent is directed to consider the same and pass appropriate orders on merits and in accordance with law after duly considering the order passed in W.P.Nos. 19906 and 19926 of 2022 dated 05.08.2022. No costs.