M/S Pundir Traiders vs. State Of U P And 4 Others

Held

The Court held that the petitioner, having participated in an open auction and offered the highest bid of Rs. 70.78 lacs, could not subsequently challenge the premium amount which constituted 50% of the total bid. Consequently, the 18% GST levied on this premium amount was also not challengeable. Regarding user charges, the Court found that they were demanded as per the terms of the agreement signed by the petitioner. The Court noted that the petitioner had not disputed that the user charges were demanded as per the agreement and that the agreement itself had not been produced before the Court. Therefore, the Court concluded that it was not open for the petitioner to challenge the terms and conditions of the agreement signed by them. The Court found no grounds to grant a writ of mandamus and accordingly dismissed the writ petition.

Facts

The petitioner, M/s Pundir Traders, participated in an auction for a shop in the Mandi and offered the highest bid of Rs. 70.78 lacs for shop no. 66. The respondent Mandi Samiti issued an allotment letter dated 27.07.2021, requiring the petitioner to deposit the remaining premium amount as per the terms. The respondent Mandi Samiti stated that 50% of the premium amount (Rs. 35.39 lacs) plus 18% GST (Rs. 6,37,020) and user charges for the coming year (Rs. 32,670) plus GST (Rs. 5,881) were due, totaling Rs. 42,14,571. The petitioner sought a writ of mandamus to prevent further deposits and to issue a fresh allotment letter due to discrepancies, and to accept premium amounts in installments. The petitioner argued that the demanded charges contravened the Mandi Samiti Allotment Regulations, 2016.

Key Issues

1. Whether the Mandi Samiti can demand premium charges and consequential GST on the premium amount that are in contravention of the Mandi Samiti Allotment Regulations, 2016, when the shop was allotted through an open auction based on the petitioner's highest bid? (Question of law) 2. Whether the Mandi Samiti can demand user charges that are in contravention of the terms of the agreement signed by the petitioner? (Question of mixed law and fact) Petitioner's arguments: The petitioner contended that the premium charges and user charges demanded by the respondent were in contravention of the Mandi Samiti Allotment Regulations, 2016. They sought a mandamus to prevent further deposits and to issue a fresh allotment letter with corrected discrepancies, along with permission for installment payments. Respondent's arguments: The respondent Mandi Samiti, through its counsel, submitted that 50% of the premium amount, along with 18% GST on it, and user charges plus GST were due as per the terms of the agreement. They argued that the petitioner had offered the bid in an open auction, and it was not permissible to challenge the premium amount or the consequential GST. They also stated that user charges were demanded as per the agreement, and the petitioner could not challenge the terms of the signed agreement, which was not even placed on record.