Case Note & Summary
The respondent, P.S.T. Engineering Construction, a contractor, filed a writ petition before the Madras High Court challenging resolution No.4.17/487 dated 10.08.2018 of the Tamil Nadu Slum Clearance Board (TNSCB) and subsequent proceedings, seeking direction to release a balance sum of Rs.2,75,44,915/- along with 1% bonus. The resolution pertained to the construction of 864 tenements under PMAY(U)-HFA scheme and dealt with the contractor's request 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/Government Department to verify the claims under GST. The writ petition was allowed by a learned single judge on 4.4.2022. The appellants, the Government of Tamil Nadu and TNSCB, filed the present writ appeal. The Division Bench examined the contract terms, noting that Clause 6.6 and special conditions provided that all applicable taxes are to be paid and Government Order G.O.264 dated 15.09.2017 would apply. The court observed that there was a dispute regarding payment of tax based on the contract terms, and such disputes cannot be resolved in writ proceedings. The court set aside the writ order and allowed the writ appeal, directing the parties to resolve the dispute either by invoking arbitration clause or by approaching the competent forum in the manner known to law. No costs were awarded.
Headnote
A) Constitutional Law - Writ Jurisdiction - Contractual Disputes - Dispute regarding payment of GST under a construction contract - The court held that since there is a dispute regarding payment of tax based on the terms and conditions of contract, the issues cannot be resolved in writ proceedings - Held that the writ order is set aside and the Writ Appeal stands allowed (Paras 2-3).
Issue of Consideration
Whether a writ petition is maintainable for resolving a dispute regarding payment of GST under a construction contract, or whether the parties should be relegated to arbitration or civil court.
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
- Tax payment under contract terms
