M/S Shiv Shakti Engineering Works vs. State Of Chhattisgarh

Facts

The petitioner, M/s Shiv Shakti Engineering Works, filed a writ petition seeking directions for payment of GST over and above the quoted rates, and to act in accordance with a prior correspondence. The petitioner was awarded a work contract after submitting a bid at 17.90% above the Schedule of Rates (SOR). The petitioner claims they did not include GST in their quoted rates, relying on Clause 14 of the NIT which stated "GST shall be applicable as per the directive of Govt. of India / Govt. of C.G.". However, Clause 41.1 of the NIT stated that quoted rates were inclusive of all applicable taxes. The petitioner's grievance arose when GST was not reimbursed. Respondent No. 3, by letter dated 19.07.2024, informed the petitioner that Clause 41.1 was a clerical error and was inserted by mistake.

Held

The Court held that it is a settled proposition of law that the High Court should not exercise its writ jurisdiction under Article 226 of the Constitution of India when disputed questions of fact are involved. The Court referred to several Supreme Court judgments, including Chairman, Grid Corporation of Orissa Ltd. v. Sukamani Das, S.P.S. Rathore v. State of Haryana, Shubhas Jain v. Rajeshwari Shivam, Union of India v. Puna Hinda, and M.P. Power Management Co. Ltd. v. Sky Power Southeast Solar India (P) Ltd., emphasizing that such disputes, especially those arising from contracts and requiring factual adjudication, are better resolved by civil courts or other agreed forums. The Court noted that the petitioner's claim for GST reimbursement was contingent upon resolving disputed questions of fact regarding the interpretation of the NIT clauses and the nature of the error. The Court found that the insertion of Clause 41.1 was admitted to be a clerical error, but allowing the petitioner to take advantage of this error would cause a huge loss to the public exchequer. Therefore, the Court concluded that it would not be appropriate to entertain the writ petition due to the involvement of disputed questions of fact.

Key Issues

1. Whether the Petitioner is entitled to claim GST over and above the quoted rates, considering the conflicting clauses in the NIT (Clause 14 vs. Clause 41.1), and whether the High Court can adjudicate this disputed question of fact under Article 226 of the Constitution of India. Petitioner's Arguments: The petitioner argued that their bid was exclusive of GST as per Clause 14, and Clause 41.1, stating rates were inclusive of all taxes, was a clerical error. They relied on correspondence from Respondent No. 3 acknowledging this error and cited cases like ABL International Ltd. and Anr. Vs. Export Credit Guarantee Corporation of India Ltd. and Ors., Kathupalli Venkata Sowmya Vs. State of Andhra Pradesh, and Kanika Construction Vs. State of U.zP. And Others. Revenue/State's Arguments: The State counsel argued that the petition was not maintainable as it involved disputed questions of fact. They contended that Clause 41.1, deeming rates inclusive of all taxes, was a clerical error that needed correction to prevent a huge loss to the public exchequer. They also submitted that administrative approval was given assuming GST would be paid separately.