M/S Parmar Enterprises vs. The State Of Bihar

Facts

M/s Parmar Enterprises (the petitioner) filed a writ petition before the Patna High Court seeking payment of the difference in GST at 7%, allegedly due as per Clause 35 of the Standard Bidding Document and contract clauses in various works departments of the Government of Bihar. The petitioner claimed that this difference arose because GST was levied after tenders were received. The petitioner had made repeated requests to the concerned authorities for payment, but no response was received, and the dispute remained unresolved. The petitioner prayed for the writ petition to be disposed of in terms of a previous judgment by the same court in M/s. Raghoji House of Distribution Vs. The State of Bihar & Ors. (CWJC No.13024 of 2022). The respondents are various authorities of the Rural Work Department of the State of Bihar.

Held

The Court, without delving into the merits of the GST claim, disposed of the petition by directing the authorities to resolve the dispute in accordance with the Bihar State Litigation Policy, 2011, and the principles laid down in the case of M/s. Raghoji House of Distribution. The Court directed Respondent No. 5, the Executive Engineer, R.W.D., Work Division, Areraj/Raxaul, to examine the petitioner's case, ensure an early decision, and disburse any legitimate dues payable under the work order within two months. Failure to do so would result in a cost of Rs. 5,000/- to be recovered from the personal salary of the concerned officer. Respondent No. 1, the State of Bihar through the Secretary, Rural Work Department, was directed to ensure an effective grievance redressal mechanism, preferably on a digital platform, and to inform the public about its availability. The Court emphasized that all issues on merit, facts, and law are left open to be decided by the decision-making authority, provided it complies with the principles of natural justice. Liberty was reserved for the parties to initiate fresh action if needed. The State was also directed to file an affidavit of compliance within three months. The Court explicitly stated that it had not adjudicated the claims on merits.

Key Issues

1. Whether the petitioner is entitled to the difference in GST at 7% as per Clause 35 of the Standard Bidding Document and contract clauses, given that GST was levied after the receipt of tenders? (Question of mixed law and fact, concerning contractual interpretation and tax levy). 2. Whether the State authorities have failed to adhere to the Bihar State Litigation Policy, 2011, and the principles of natural justice by not responding to the petitioner's representations and delaying the resolution of the dispute? (Question of law, concerning administrative policy and procedural fairness). Petitioner's arguments: The petitioner argued that they are entitled to the differential GST amount as per the contractual terms. They also contended that the authorities have failed to address their grievances despite repeated requests, thereby violating the spirit of the Bihar State Litigation Policy, 2011, which aims to reduce litigation and expedite dispute resolution. They sought relief in line with the judgment in M/s. Raghoji House of Distribution. Revenue's arguments: The judgment records no specific arguments from the respondents on the merits of the GST claim. However, the counsel for the respondents did not object to the prayer being allowed in terms of the previous judgment.