IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C) No. 5417 of 2008(T)
1. RELIANCE GENERATORS PVT. LTD.,
... Petitioner
Vs
1. UNION OF INDIA, REPRESENTED BY ITS
... Respondent
2. CHIEF ENGINEER (E), BHARAT SANCHAR
3. SUPERINTENDING ENGINEER (E),
4. EXECUTIVE ENGINEER,
For Petitioner :SRI.T.V.LAKSHMANAN
For Respondent :SRI.K.KESAVANKUTTY, SC, BSNL
The Hon'ble MR. Justice ANTONY DOMINIC
Dated :18/03/2008
O R D E R
ANTONY DOMINIC, J.
===============
W.P.(C) NOs. 5417, 5418 & 3755 OF 2008
===========================
Dated this the 18th day of March, 2008
J U D G M E N T
The issues raised in these writ petitions being similar, the
cases are disposed of by this common judgment.
2. In these writ petitions, petitioner contends they were
awarded a contract for supplying, installation, testing and
commissioning of diesel generator sets to various telephone
exchanges of the Department of Telecom and Ext.P1 is a specimen
copy of the contract. It is stated that the parties understood the
transaction as an interstate transaction and according to the
petitioner, D Forms prescribed under the Central Sales Tax Act were
also issued by the respondents. Exts. P2 to P4 are the assessment
orders issued by the Sales Tax Authority of Tamil Nadu assessing
the petitioner under the CST Act for the assessment years 1995-96,
1996-97 and 1997-98. It is stated that the same transactions came
to be assessed under the Kerala General Sales Tax Act and Exts.P5,
P6 and P7 are the assessment orders. It is contended that the
petitioner has taken all available steps for questioning the
WPC 5417, 5418 & 3755/08
:2 :
assessment under the KGST Act and to avoid the additional
monetary liability.
3. According to the petitioner, in terms of Ext.P1 contract,
if there is a liability on account of the transaction being treated as a
works contract, the respondents should bear the said liability. On
the strength of this contractual provision, petitioner claimed
settlement of this additional liability and submitted Exts.P16 to P18
in these writ petitions. Subsequently, Exts. P19 and P20 were also
issued claiming interest on the amount claimed under Exts.P16 to
P18. On receipt of the request so made by the petitioner, the
respondents issued Ext.P21 in WP(C) No.5417/2008 rejecting the
claim. In the other two writ petitions, though similar requests have
been received by the respondents, there is no reply similar to
Ext.P21. It is in this background, the writ petitions have been filed
praying for directing the respondents to pay the petitioner the sales
tax liability relatable to the works contract executed by the
petitioner during 1995-96, 1996-97 and 1997-98.
4. Counsel for the petitioner contends that the contract
which they had was with the Department of Telecommunications,
WPC 5417, 5418 & 3755/08
:3 :
which has now become a Company. It was contended that being an
authority under Article 12 of the Constitution, amenable to the writ
jurisdiction of this court, the respondent has a duty to act fairly and
reasonably even in contractual matters. According to the learned
counsel, though the claim raised by the petitioners in these writ
petitions is a monetary claim arising under a contract, in view of its
constitutional obligation to be fair and reasonable in its dealings
and since the refusal to bear the additional monetary liability
reflects unfairness on its part, a writ petition is maintainable and
this court will be justified in issuing a writ of mandamus directing
the respondents to pay the petitioner the tax liability relatable to the
works contract executed by them during the aforesaid years.
5. In order to appreciate the contentions of the learned
counsel for the petitioner, it is necessary to refer to the stand taken
by the respondents in Ext.P21 produced in WP(C) No.5417/2008. It
is the stand of the respondents that though the transaction between
them is an interstate transaction with the liability to pay tax under
the Central Sales Tax Act, the liability of the petitioner to pay tax
under the KGST Act arose out of the order of the Kerala Sales Tax
WPC 5417, 5418 & 3755/08
:4 :
Appellate Tribunal, Tribunal, which was based on the request made
by the petitioner to consider the transaction between them and the
Department as a local works contract. They have also extracted the
relevant portion of the order of the Tribunal, in Ext.P21. It is stated
that the Kerala Telecom Circle was not a party in the case and the
Department is not responsible for any liability due to the petitioner’s
wrong interpretation of the rules/deviation from the tender
conditions. It is stated that the BSNL is not bound to meet the tax
liabilities of the petitioner under the KGST Act. Therefore, according
to the respondents, the tax liability arose only in view of the case
set up by the petitioner before the Appellate Tribunal on a wrong
interpretation of the contract and the rules.
6. Necessarily, therefore in order to adjudicate the
correctness of the stand taken by the respondents in Ext.P21
referred to above, interpretation of the relevant clause of the
contract, appreciation of the stand taken by the petitioner before
the Appellate Tribunal and such other questions of fact is necessary.
In my view, this adjudication is not possible in a proceedings under
Article 226 of the Constitution of India and therefore, if at all the
WPC 5417, 5418 & 3755/08
:5 :
petitioner has a claim against the respondents, petitioner has to
pursue the same before the appropriate Civil Court by filing a suit.
7. It is true that in several cases, Supreme Court and also
this court have taken the view that even in contractual matters, a
State or an authority under Article 12 of the Constitution has a duty
to act fairly and reasonably. In this case, I am not prepared to
accept the contention of the petitioner that Ext.P21 is vitiated by
unreasonableness or unfairness. A reading of Ext.P21 shows that
the respondents have their reasons why they cannot be fastened
with the liability to pay tax under the KGST Act and the correctness
of which can be decided only in a regular suit. This does not spell
out any unreasonable or arbitrariness on the part of the
respondents.
8. In so far as WP(C) Nos. 5418 and 3755/08 are
concerned, there is no order similar to Ext.P21 produced in WP(C)
5417/08. But then, facts being similar and the contention of the
respondents being one of denial of its liability, I do not think it
necessary to require the respondents to pass an order dealing with
the claim raised by the petitioner by Exts.P16 to P18 or the interest
WPC 5417, 5418 & 3755/08
:6 :
claimed in Exts. P19 and P20 therein.
In the result, without prejudice to the contentions raised in
these writ petitions and also reserving liberty to the petitioner to
seek appropriate reliefs before the Civil Court, these writ petitions
are dismissed.
ANTONY DOMINIC,JUDGE.
Rp