M Lakshmana Raju vs. The Chief Commissioner

Facts

The petitioner, M. Lakshmana Raju, a Class I Contractor, was entrusted with the work of improvements to Rakshasi Halla by the Bruhat Bangalore Mahanagara Palike (BBMP). The work order dated July 13, 2020, did not contain a specific clause regarding the payment of Goods and Services Tax (GST). The petitioner's grievance is that the BBMP deducted GST from the contract amount, and he claims he is entitled to the entire contract amount as billed, arguing that deductions for GST are impermissible without a contractual provision. The petitioner submitted a representation dated February 7, 2022, to the Executive Engineer regarding this deduction.

Held

The Court acknowledged that the petitioner had submitted a representation (Annexure-E) dated February 7, 2022, concerning the deduction of GST from the contract amount. The Court found that the respondent-BBMP has a duty and obligation to consider this representation. Consequently, the Court directed respondents 1 to 3 (The Chief Commissioner, The Chief Engineer, and The Executive Engineer of BBMP) to consider the representation dated February 7, 2022, and pass an appropriate order in accordance with law within a period of two months from the date of receipt of a copy of the order. The Court did not definitively rule on whether the BBMP was entitled to deduct GST, leaving that determination to the consideration of the representation.

Key Issues

1. Whether the respondent-BBMP is legally entitled to deduct GST from the contract amount when the work order and agreement do not explicitly provide for such a deduction? (Question of law) Petitioner's contention: The petitioner argues that unless the contract expressly provides for the deduction of GST, the respondents cannot deduct it from the contract amount. He asserts entitlement to the full billed amount. The petitioner relies on the absence of a GST clause in the work order and agreement. Revenue/State's contention: The learned counsel for the respondents submits that the issue of whether the contract amount includes GST or not needs to be decided by examining the agreement and the work order. They further state that the petitioner's representation at Annexure-E will be considered in accordance with law, and an order will be passed within a timeframe fixed by the Court.