Ani Kareem vs State Of Kerala on 21 March, 2019
Kerala High Court
Ani Kareem vs State Of Kerala on 21 March, 2019
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE SHAJI P.CHALY
THURSDAY ,THE 21ST DAY OF MARCH 2019 / 30TH PHALGUNA, 1940
WP(C).No. 31547 of 2017
PETITIONER/S:
ANI KAREEM,
AGED 29 YEARS,
ARADHANA, CHAVARA B.P.O.,
KOLLAM – 691 583.
BY ADVS.
DR.K.P.SATHEESAN (SR.)
SRI.K.SUDHINKUMAR
SRI.MUHAMMED IBRAHIM ABDUL SAMAD
SRI.P.MOHANDAS (ERNAKULAM)
SRI.S.K.ADHITHYAN
SRI.S.VIBHEESHANAN
RESPONDENT/S:
1 STATE OF KERALA,
REPRESENTED BY THE SECRETARY,
WATER RESOURCES DEPARTMENT,
GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM – 695 001.
2 THE SUPERINTENDING ENGINEER,
IRRIGATION SOUTH CIRCLE,
THIRUVANANTHAPURAM – 695 033.
R1 & R2 BY SRI. K.V.MANOJ KUMAR, SPECIAL GOVERNMENT
PLEADER.
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 12.03.2019, THE COURT ON 21.03.2019 DELIVERED THE FOLLOWING:
W.P.(C) No.31547 of 2017 2
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Ani Kareem vs State Of Kerala on 21 March, 2019
JUDGMENT
This writ petition is filed by the petitioner, who is a contractor, seeking direction to the 2nd respondent, i.e., the Superintending Engineer, Irrigation South Circle, Thiruvananthapuram to take over the payment of Goods & Service Tax (GST) by Government, and also to see that necessary weighing facilities are provided at the work-site so as to bring the rocks in bulk quantities, and alternatively seeking direction to the 2nd respondent to release the petitioner from the present tender without any risk and cost, if the GST cannot be taken over by the Government, and for other related and consequential reliefs. Brief material facts for the disposal of the writ petition are as follows:
- The 2nd respondent invited tenders for construction of Groyne field at Indian Rare Earth (IRE) mining area between chainage 34 km. to chainage 35 km. at Vellanathuruth in Alappad Panchayat, Kollam District. Petitioner quoted the lowest rate and the letter of acceptance of the tender is given to the petitioner by the 2nd respondent. However, in the said letter, it is specified that petitioner has to pay GST at the rate of 18%, which was not there in the tender notification. According to the petitioner, at the most petitioner was liable to pay tax at the rate of 4% under the Kerala Value Added Tax Act (KVAT).
- Further, it is stated that, the District Collector, Kollam stayed the operation of quarries in Kollam District, and therefore, rocks are not available in Kollam. Due to the said unforeseen circumstances, petitioner requested that GST may be paid by the Government and the weighing facilities may be provided at the work-site for weighing bulk quantities of rocks. It is also the case of the petitioner that, if the above conditions cannot be satisfied by the 2nd respondent, petitioner may be released from the tender without any risk and cost. It is also submitted that, to ventilate the grievances, petitioner has submitted Exts.P3 to P5 representations before the 2nd respondent, however, no action was initiated, and therefore, petitioner had no other alternative than to approach this Court by filing this writ petition. The sum and substance of the contention put forth by the petitioner is that, if the petitioner is unable to carry on with the contract, there is every likelihood of termination of the contract at the risk and cost of the petitioner.
- A detailed counter affidavit is filed by the 2nd respondent, refuting the allegations and claims and demands raised by the petitioner. Since the petitioner was the lowest bidder, selection notice was sent to him, requesting him to attend the office of the 2nd respondent within 14 days to execute agreement for the contract. Petitioner was also well informed as per Ext.P2 dated 18.07.2017 regarding the imposition of GST, which replaced the then existing VAT system of taxation. As per clause 9 of Ext.P2, petitioner was informed that GST will be applicable as per rules. After knowing the liability to pay GST applicable to the contract, petitioner attended the office of the 2nd respondent on 18.08.2017 and signed the agreement, evident from Ext.R2(a). In that view of the matter, petitioner has to commence and complete the work as per the conditions of contract entered into with the Department and the petitioner is liable to pay GST at applicable rates, when payment of the contract is made subject to the decision of Government or GST Council, and being a deposit work, no financial liability could be taken either by the Irrigation Department or by the Government.
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Ani Kareem vs State Of Kerala on 21 March, 2019
- It is also pointed out that, the Contract for Public Works in the Kerala State is mainly governed by the Revised Kerala Public Works Department Manual, which is applicable to the Irrigation Department also. Clause 2008 of the Manual stipulates that, it is important that the contractor shall examine the site condition and satisfy himself of the availability of materials at nearby places, difficulties which may arise during execution etc., before submitting the tender for the work. Therefore, it can only be presumed that petitioner has ascertained the availability of rocks prior to the submission of his bid. Ext.P2(3) to P2(7) forms part of the agreement executed by the petitioner with the 2nd respondent. Ext.P2 series is the accepted schedule in which the cost of supplying and laying of blasted granite stones is inclusive of supply of stones, loading from quarry to tipper by crane and conveying to site, weighing on departmental weigh-bridge for measurement, unloading and dumping and packing in position at site to lines and levels to form the armoury layer etc. Petitioner is also aware of the fact that the weighing machine is having 40 ton capacity. However, the Department has no objection if the Indian Rare Earth Limited, the funding agency and beneficiary of this work, agrees to replace the existing weighing machine with new one having 60 ton capacity.
- It is true, petitioner has submitted Ext.P3 representation requesting to exempt him from paying the excess tax liability emanating out of the introduction of GST. Since the 2nd respondent is not competent to take a decision, the issue has already been taken up with the Chief Engineer, Irrigation and Administration, Thiruvananthapuram, as per a letter dated 17.08.2017, however, in the meantime, petitioner attended the office on 18.08.2017 and voluntarily executed the agreement with the full knowledge that he is liable to pay GST. Therefore, according to the 2nd respondent, petitioner is not entitled to get any reliefs as are sought for in the writ petition.
- I have considered the rival submissions made across the Bar and perused the pleadings and the documents on record.
- The facts stated above would make it clear that, the subject issue raised by the petitioner is relating to the liability of the petitioner to pay the GST introduced on and with effect from 01.07.2017. In fact, as per Ext.P2 selection notice dated 18.07.2017, petitioner was informed that he is liable to pay GST instead of tax under the KVAT Act. Thereafter, petitioner has submitted Ext.P3 representation. However, during the pendency of the representation itself, petitioner has volunteered to sign the agreement, and accordingly, petitioner has signed Ext.R2(a) agreement on 18.08.2017, also undertaking to pay the liability of the petitioner to pay GST. Therefore, petitioner at a later point of time cannot contend that petitioner is not liable to pay GST, since at the time of invitation of tender, petitioner was not aware that petitioner has the liability to pay GST. However, in my considered opinion, having signed the agreement fully knowing that GST has come into force on and with effect from 01.07.2017, petitioner cannot turn around and say that petitioner is not liable to pay the tax and the Government should own up the responsibility to pay the GST. The said stand adopted by the petitioner is against the basic principles of Sections 91 and 92 of the Indian Evidence Act, dealing with execution of contracts etc. etc., and an antithesis to the tenets of the provisions of the Indian Contract Act.
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Ani Kareem vs State Of Kerala on 21 March, 2019
- The next contention advanced by learned counsel for the petitioner is in respect of the ban imposed by the District Collector, Kollam, against quarrying operations, which constrains the petitioner to collect rubbles from outside, which is an unforeseen circumstance, and therefore, the petitioner cannot carry out the contract in accordance with the rates quoted by the petitioner. However, petitioner has executed the agreement without any reservation and after signing the agreement, petitioner cannot advance such contentions, especially when there is no covenant in the contract in that manner. I also find force in the contention advanced by learned Government Pleader that in accordance with Clause 2008 of the PWD Manual, before submitting the tender, petitioner was duty bound to ascertain the required details with respect to execution of the work, and when petitioner submitted the tender without any restrictive covenants with respect to collection of raw materials, petitioner is not at liberty to contend that petitioner is entitled to get relieved from the work without risk and cost, on account of the said alleged “unforeseen circumstances”.
- Having evaluated the factual and legal situations, I am of the considered opinion that, petitioner has not made out any case of arbitrariness or illegality on the part of the respondents, justifying interference of this Court, invoking the discretionary powers conferred under Article 226 of the Constitution of India.
The writ petition fails, accordingly it is dismissed.
Sd/-
SHAJI P.CHALY JUDGE APPENDIX PETITIONER’S/S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE NOTIFICATION ISSUED BY THE 2ND RESPONDENT IN FORM NO.83 OF P.W.D MANUAL.
EXHIBIT P2 TRUE COPY OF THE LETTER GIVEN BY THE 2ND RESPONDENT TO THE PETITIONER DATED 18-07-2017.
EXHIBIT P3 TRUE COPY OF THE REPRESENTATION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DATED 27-07-2017.
EXHIBIT P4 TRUE COPY OF THE REPRESENTATION FILED BY THE PETITIONER TO THE 2ND RESPONDENT DATED 14-09-2017.
EXHIBIT P5 TRUE COPY OF THE REPRESENTATION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DATED 15-09-2017.
RESPONDENTS’ EXHIBITS:
EXHIBIT R2(A) TRUE COPY OF THE AGREEMENT ENTERED INTO BETWEEN THE PETITIONER AND THE 2ND RESPONDENT.
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Ani Kareem vs State Of Kerala on 21 March, 2019
//TRUE COPY// P.S. TO JUDGE St/-
Indian Kanoon – http://indiankanoon.org/doc/37919568/ 5
