M/S Adola And Company vs. Municiapl Countil Pali

Held

The Court held that since a dispute resolution mechanism was explicitly provided for in the contract through Clause 16 of the NIT, which designates the Superintending Engineer as the final arbiter of contractual disputes, the petitioner should be relegated to that forum. The Court reasoned that the dispute regarding the incidence of GST liability falls within the purview of questions arising out of or relating to the contract, which the Superintending Engineer is empowered to decide. Therefore, the writ petition was not the appropriate remedy for resolving this contractual disagreement. The Court directed that if the petitioner files a claim before the Superintending Engineer, it shall be decided expeditiously and in accordance with the law, without being influenced by the High Court's order.

Facts

The petitioner, M/s Adola and Company, filed a writ petition seeking the release of Rs. 4.94 lacs, representing the GST amount on a contract for the supply of a fire-fighting vehicle to the respondent, Municipal Council, Pali. The petitioner contended that the contract stipulated the incidence of GST would fall on the respondent. The respondent, however, denied this claim, creating a dispute. The contract included Clause 16 of the NIT, which designated the Superintending Engineer as the final authority for resolving all questions related to the contract, including claims arising during or after its completion. The High Court noted that a dispute resolution mechanism was already in place as per the contract.

Key Issues

1. Whether the High Court, in its writ jurisdiction, should entertain a dispute concerning the contractual allocation of GST liability, given the existence of an alternative dispute resolution mechanism within the contract? (Question of law and fact) Petitioner's Argument: The petitioner sought the release of the GST amount, implying a dispute over who bears the tax burden as per the contract. The petitioner's primary goal was to recover the Rs. 4.94 lacs. Respondent's Argument: The respondent denied the petitioner's claim regarding the incidence of GST, as evidenced by Annexure-P/7. The respondent did not file any reply or appear before the court.