Prabhat Tent House Through Proprietor Shri Pankaj Agrawal vs. Election Commission Of INDIA

Held

The Court held that the writ petition was maintainable. It found that the dispute, while arising from a contract, did not involve complicated questions of fact requiring a detailed trial and could be decided based on the undisputed documentary record, specifically the Letter of Acceptance. The objection regarding the non-joinder of the GST Department was also dismissed, as the petitioner's grievance was solely against the respondents for deducting the GST amount, not against the GST Department itself. The objection of delay and laches was also rejected, considering the respondents' reliance on recent communications. The Court found substance in the petitioner's contention that the respondents were not justified in deducting the GST amount. The Letter of Acceptance clearly provided for GST payable in addition to the quoted rates. The respondents failed to show any material on record to demonstrate a subsequent modification of these terms with the petitioner's consent or any contractual provision authorizing such a deduction. Subsequent correspondence could not override the specific terms of the Letter of Acceptance. Therefore, the deduction of Rs. 3,96,396/- towards GST was held to be unjustified. The Court directed the respondents to pay this amount to the petitioner along with simple interest at 6% per annum from the date of deduction until actual payment.

Facts

The petitioner, Prabhat Tent House, was awarded a contract for supplying materials for the Lok Sabha Election, 2019. The Letter of Acceptance stipulated that GST at 18% would be payable in addition to the quoted rates. The petitioner completed the work and submitted bills. Despite having deposited the GST liability with the GST Department, the respondents deducted Rs. 3,96,396/- towards GST from the payments made to the petitioner in October 2019 and March 2024. The petitioner filed a writ petition seeking release of the deducted amount and interest, arguing the deduction was contrary to the contract terms. The respondents contended the petition was not maintainable due to the contractual nature of the dispute and alleged delay and laches, asserting GST was to be calculated separately and deducted.

Key Issues

1. Whether the writ petition is maintainable under Article 226 of the Constitution of India, given that the dispute arises from a contractual relationship and involves disputed questions of fact regarding GST treatment under tender conditions? 2. Whether the respondents were justified in deducting the GST amount of Rs. 3,96,396/- from the petitioner's bills, contrary to the terms of the Letter of Acceptance? Petitioner's arguments: The writ petition is maintainable as the facts are undisputed and can be decided based on documentary evidence, particularly the Letter of Acceptance. The deduction of GST is arbitrary and contrary to the express terms of the Letter of Acceptance, which clearly stated GST would be payable in addition to quoted rates. The respondents, as public authorities, must act fairly and adhere to contractual terms. The petitioner has already discharged his GST liability, and the deduction results in unjust withholding of contractual dues. Respondents' arguments: The writ petition is not maintainable as the dispute is contractual and involves disputed facts. Necessary parties like the Chief Electoral Officer and GST Department have not been impleaded. The petition suffers from delay and laches. GST was to be calculated separately and deducted, and the bills submitted by the petitioner included GST, which was then correctly calculated and paid after separate accounting. Payments were made as per revised calculations following objections.