P.Arjun vs. Prashant M.Wadnere, I.A.S.

Facts

These contempt petitions were filed by P. Arjun and P. Udhayanand against the District Collector and the Commissioner of Nagercoil Municipality for wilful disobedience of a Division Bench order dated August 14, 2019. The original writ petitions sought the refund of earnest money and rental advance paid by the petitioners, who were successful bidders in a municipality auction that failed to fructify. A Single Judge had allowed the refund with interest, which was modified by the Division Bench to refund the principal amount without interest. The Municipality failed to comply. During the pendency of the contempt petitions, the Municipality refunded the amounts, except for GST deducted and remitted to the Sales Tax Department. The Court directed the Standing Counsel to provide details of GST payments to enable petitioners to claim refunds.

Held

The Court noted that the Municipality had refunded the money to the petitioners, except for the GST deducted and remitted to the Sales Tax Department. Since the contract had been frustrated and no service was rendered, there was no basis for levying service tax (GST). The Court directed the Commissioner of Nagercoil Municipality to issue a No Objection Certificate (NOC) to the petitioners to facilitate the refund of the GST remitted to the Commercial Department. With this direction, the contempt petitions were closed. The Court did not explicitly find wilful disobedience but rather addressed the issue of the deducted GST to resolve the petitioners' remaining grievance. The operative direction was the issuance of an NOC for GST refund.

Key Issues

1. Whether the respondents have wilfully disobeyed the order of the Division Bench dated August 14, 2019, by failing to refund the earnest money and rental advance to the petitioners? (Question of fact and law) Petitioner's argument: The petitioners argued that the respondents wilfully disobeyed the Division Bench order by not refunding the amounts as directed. They sought punishment for the contemnors. Revenue/State's argument: The respondents, through their counsel, represented that pending the contempt petitions, the Commissioner of Nagercoil Municipality had refunded the money to the petitioners, except for the GST deducted and remitted to the Sales Tax Department. They provided details of the GST amounts deducted and remitted, indicating that the balance amounts had been paid in installments and the petitioners had no further grievance regarding those payments. They sought to demonstrate compliance with the spirit of the order, albeit with a deduction for GST.