Contractual obligations regarding tax reimbursements and security deposit releases must be met based on evidence of completion and payment obligations.

JUDGMENT

The Petitioner is a partnership firm and is engaged in the construction work including the works for the Government Departments. The petitioner was entrusted with the work at the instance of the Kerala Water Authority, namely, “KIIFB- Augmentation of WSS to Kollam Corporation- Phase II- Package III- Supplying, laying, commissioning and maintaining 1016 mm diameter 8.8 mm thick MS Clear Water Pumping Main from Treatment Plant at Vasoorichira to OHSR at Manichithodu, 914 mm diameter 8.0 mm thick MS Clear Water Gravity Main from Manichithodu to Anandvalleeswaram and construction of 16 Mtr Staging 54LL OHSR at Manichithodu”. Ext.P1 is the agreement entered into in this regard. The petitioner completed the work on 31.03.2023. However, according to the petitioner, the differential amount receivable by the petitioner towards the increase in the rate of GST was not paid by the respondents, despite the fact that they are under the contractual obligation to pay the same. Besides, the security deposit furnished by the petitioner was also not released. This writ petition is submitted by the petitioner in such circumstances seeking the following reliefs:

“A. Issue a Writ of Mandamus or such other appropriate writ, order or direction directing the 3rd respondent to pay a sum of Rs.65,58,361/- (Rupees Sixty five lakhs fifty eight thousand three hundred and sixty one only) towards the differential rate of GST due on the Bills and also release the sum of Rs.1,71,42,000/- (Rupees One Crore seventy one lakhs forty two thousand only four) held as security deposit and the retained amount of Rs.32,62,888/- (Rupees Thirty two lakhs sixty two thousand eight hundred eighty eight only) under the head operation and maintenance.

B. Issue a Writ of Mandamus or such other appropriate writ, order or direction directing the respondents to pay interest on the amounts due @ 10% p.a. from 31.03.2023 (date of completion) till the date of payment.

C. Pass such other appropriate writ, order or direction as this Hon’ble Court may deem just and fit in the circumstances of the case.”

2. In the writ petition, it is specifically averred by the petitioner, with specific reference to Clause 8.15.2 in agreement that, any excess in taxes and duties within the original contract period, shall be borne by the authority.

Thus, it was contended that, the petitioner is entitled to get the differential amount in GST, as the rate of GST was increased during the execution of contract from 12%

to 18%.

3. A statement has been submitted by the learned Standing Counsel for the respondents 2 and 3, in which the contentions raised by the petitioner are denied and the reliefs sought are opposed. According to the respondents, based on Annexure R2(a) circular, the GST applicable to the works were revised from 12% to 18% with effect from 18.07.2022 and therefore, all the works completed and invoices generated before 18.07.2022 will be only 5% and not 12.%. According to the respondents, major part of the petitioner’s bills were generated prior to 18.07.2022 and all the bills were already paid. With regard to the release of the security deposit, it is contended that, since the major work undertaken by the petitioner included laying of pipeline, a different completion date is contemplated therein, subject to the completion of the project as such. Therefore, the same also cannot be released at this point of time.

4. I have heard learned Counsel for the petitioner and the learned Standing Counsel for the respondents 2 and 3.

5. The first