The main legal point established in the judgment is the court's authority to direct the refund of service tax deposited by the decree holder when the service tax is found to be not applicable, and the acceptance of the decree holder's undertaking not to make any further claims on the Service Tax Department or any other authority with respect to the said amounts.

Manmohan Singh, J.

1. The present execution petition has been filed on the basis of the Awards passed in favour of the decree-holder on 11th June, 2009 and 11th May, 2010.

2. The brief facts are that the decree-holder was awarded the contract for comprehensive maintenance of Ring Road and Outer Ring Road vide Agreement No.17/EE/PWD-XXIV/2005-2006 for the period of three years. The stipulated date of start of the contract was 24th August, 2005 and the stipulated date of completion was 23rd August, 2008. The disputes arose between the parties during the currency of the work which was first referred to the Disputes Resolution Expert (DRE) by the Chief Engineer, PWD, Maintenance Zone M-3 in terms of para 21.1 of the General Condition of Contract (GCC). Being aggrieved of the recommendations of the DRE, the decree-holder invoked clause 22 of the GCC which contained the Arbitration Agreement between the parties and requested the Chief Engineer to refer the disputes to arbitration. The sole Arbitrator was appointed and the award was made on 15th June, 2009 against the judgment-debtor. The judgment-debtor filed objections against the said award vide OMP No.578/2009 under Section 34 of the Arbitration and Conciliation Act, 1996. The Award dated 15th June, 2009 was set aside vide order dated 19th November, 2009 by the learned Single Judge of this Court, holding that the circular relied upon by the Arbitrator has not been brought to the notice of the petitioner for its response and, therefore, the matter was remitted back to the Arbitrator for rehearing.

3. After rehearing the parties, the Arbitrator passed the Award dated 11th May, 2010 holding thereby:

“....the notification of the Central Government imposed the service tax on the road maintenance works with effect from 16th June, 2005 which is after the date of receipt of the bids of the contractors. Therefore, the notification in question was prospective in nature and it could not be made effective retrospectively regardless of the fact that the instructions of the Director General of Works, CPWD existed. In other words, I bow down to the wishes of the respondent and consider that even if the circular instructions of the Director General of Work, CPWD are ignored, the situation does not undergo any change whatsoever regarding the liability to pay the service tax in the instant case and accordingly, I reaffirm that the service tax is payable by the respondent. Accordingly, I do not consider it necessary to disturb my award. The reference from the Hon’ble High Court of Delhi stands disposed off.”

4. The Award dated 11th May, 2010 was again challenged by the judgment debtor vide OMP No.496/2010 which was dismissed by this Court vide order dated 19th September, 2011 upholding the Award passed by the learned Arbitrator.

5. The order dated 19th September, 2011 passed in OMP No.496/2010 was challenged by the judgment debtor by filing an appeal being FAO(OS) No.558/2011. During the pendency of the said appeal, vide order dated 1st November, 2011, this Court was pleased to direct the judgment-debtor to deposit the entire decreetal amount in Court. However, only an amount of Rs.7,51,667/- was deposited by the judgment debtor and the same has been received by the decree-holder on 28th May, 2012 after the said appeal was dismissed with cost of Rs.7500/- vide order dated 12th March, 2012.

6. The decree-holder has vide letter dated 29th November, 2011 requested the judgment debtor to deposit the amount as awarded by the Arbitrator and as directed by this Court vide order dated 1st November, 2011 in FAO(OS) No.558/2011. Thereafter, vide letter dated 17th December, 2011, the judgment debtor was informed that the decree holder has already submitted returns with the Service Tax Department and has cleared the liability and all the proofs of payment have been submitted to the judgment debtor. The decree holder vide letter dated 26th March, 2012 has requested the judgment debtor to remit the am