Case Note & Summary
The respondent, a construction contractor, filed a writ petition challenging a resolution of the Tamil Nadu Slum Clearance Board (TNSCB) dated 10.08.2018 and subsequent proceedings, seeking release of a balance sum of Rs.2,75,44,915/- along with 1% bonus. The resolution pertained to a request by the contractor to pay GST at 12% of the accepted tender value in addition to the bill value. The Board resolved to consult a consultant/auditor approved by CMRL or Government Department to verify the contractor's claims under GST. The writ petition was allowed by a learned single judge. On appeal, the Division Bench examined the contract terms, including Clause 6.6 and special conditions, which provided that all applicable taxes are to be paid and that Government Order G.O.264 dated 15.09.2017 would apply. The court held that since there was a dispute regarding payment of tax based on the terms and conditions of the contract, such issues cannot be resolved in writ proceedings. The writ order was set aside and the appeal was allowed, with liberty to the parties to resolve the dispute by invoking arbitration or approaching the competent forum.
Headnote
A) Constitutional Law - Writ Jurisdiction - Contractual Dispute - Article 226 of the Constitution of India - Dispute regarding payment of GST under a construction contract - Held that writ proceedings are not appropriate for resolving contractual disputes; parties must invoke arbitration clause or approach competent forum (Paras 3).
Issue of Consideration
Whether a dispute regarding payment of GST under a construction contract can be resolved in writ proceedings under Article 226 of the Constitution of India
Final Decision
The writ order is set aside and the Writ Appeal stands allowed. No costs.
Law Points
- Writ jurisdiction not available for contractual disputes
- Dispute resolution through arbitration or civil court
- GST payment governed by contract terms and government order
Case Details
2026 LawText (MAD) (03) 309
WA No. 1790 of 2022 and CMP No. 13123 of 2022
S. M. Subramaniam, K. Surender
Mr.Ramanlal, Additional Advocate General assisted by Mr.T.Arunkumar for Additional Government Pleader (for appellant), Mr.H.S.Hredai (for respondent)
The Government of Tamil Nadu, The Tamil Nadu Slum Clearance Board, The Superintending Engineer
P.S.T. Engineering Construction
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Nature of Litigation
Writ appeal against order allowing writ petition challenging resolution of Tamil Nadu Slum Clearance Board regarding GST payment under construction contract
Remedy Sought
Appellant sought to set aside the order of the learned single judge in WP No. 34682/2019 and dismiss the writ petition
Filing Reason
Dispute regarding payment of GST at 12% on accepted tender value under a construction contract for 864 tenements
Previous Decisions
Learned single judge allowed WP No. 34682/2019 and WP No. 34687/2019 by common order dated 4.4.2022
Issues
Whether a dispute regarding payment of GST under a construction contract can be resolved in writ proceedings under Article 226 of the Constitution of India
Submissions/Arguments
Appellant argued that the dispute is contractual and not amenable to writ jurisdiction
Respondent sought release of balance sum and bonus as per contract
Ratio Decidendi
Disputes arising from contractual terms, including tax payment, cannot be resolved in writ proceedings under Article 226; parties must invoke arbitration clause or approach competent forum.
Judgment Excerpts
Since there is a dispute caused regarding payment of tax, based on the terms and conditions of contract, the issues cannot be resolved in a writ proceedings.
Procedural History
Respondent filed WP No. 34682/2019 and WP No. 34687/2019 challenging resolution dated 10.08.2018 and subsequent proceedings. Learned single judge allowed the writ petitions by common order dated 4.4.2022. Appellant filed WA No. 1790 of 2022 against that order.
Acts & Sections
- Constitution of India: Article 226
