Nagarajan.N vs. The District Collector

Facts

The petitioner, N. Nagarajan, participated in a public auction and obtained a three-year license for collecting market user charges from the 3rd respondent, the Executive Officer of Thingalnager Selection Grade Town Panchayat. The agreement incorrectly stated the GST payable by the petitioner as 5%. An audit revealed this discrepancy, prompting the local body to demand GST at the correct rate. The petitioner was informed that he must pay the balance GST at 13% for the first year and 18% for the subsequent two years. The impugned order, dated 09.03.2024, reiterates this demand. The petitioner challenged this order by filing a writ petition seeking to quash it and to direct the 3rd respondent to accept payment of 5% GST and 1% income tax along with the license fee.

Held

The Court held that the petitioner cannot take advantage of a typing mistake in the agreement. It was found that the petitioner was unable to demonstrate that the respondents had wrongly quoted the GST rate. The Court reasoned that there can be no estoppel against a statute, and when the petitioner is legally obliged to pay 18% GST, he must do so. This statutory burden cannot be shifted to the local body. Consequently, the Court did not interfere with the impugned order. The Court granted the petitioner two more weeks from the date of receipt of a copy of the order to pay the correct GST amount, after which his license would be extended. The writ petition was disposed of accordingly.

Key Issues

1. Whether the petitioner can be compelled to pay GST at the correct rate (18%) despite a typing error in the agreement stating 5% GST, thereby invoking the principle of estoppel against the statute? (Question of law) Petitioner's contentions: The petitioner argued that the agreement clearly stipulated 5% GST and that the respondents should be estopped from demanding a higher rate due to the typing mistake in the contract. The petitioner sought to pay the amount as per the agreement, including 5% GST and 1% income tax. Respondents' contentions: The respondents, through the learned Additional Government Pleader, contended that the petitioner is obligated to pay GST at the legally mandated rate, and a typing error in the agreement cannot override statutory obligations. They argued that there can be no estoppel against a statute, and the petitioner must pay the correct GST amount.