Brahmaputra Infrastructure Ltd vs Delhi Development Authority
2009 Latest Caselaw 3566 Del

*                  IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         Writ Petition No.11435/2009

%                         Date of Decision: 04.09.2009

Brahmaputra Infrastructure Ltd                          .... Petitioner
                    Through Mr.Biswajit Bhattacharya, Sr.Advocate
                               with Mr.Amit Punj, Advocate

                                   Versus

Delhi Development Authority                        .... Respondent
                    Through Mr.Ajay Verma, Advocate.

CORAM:
HON'BLE MR. JUSTICE ANIL KUMAR

1.       Whether reporters of Local papers may be              YES
         allowed to see the judgment?
2.       To be referred to the reporter or not?                NO
3.       Whether the judgment should be reported in            NO
         the Digest?


ANIL KUMAR, J.

*

The petitioner seeks a direction under Article 226 of the

Constitution of India to the respondent/DDA to reimburse the service

tax deposited by the petitioner and not to discriminate the petitioner.

The request of the petitioner is to reimburse him the amount of

Rs.60,19,872/- on account of service tax along with interest at 12%

from the date of first payment of the service tax which has been

declined on behalf of DDA by office of the Executive Engineer, South

Eastern Division No.7 contending that as per terms and conditions of

the agreement with M/s. Brahmputra Infrastructure Ltd./petitioner

service tax is not payable by the DDA.

The learned counsel for the petitioner has relied on the letter

dated 17th September, 2007 stipulating that the letter dated 25th July,

2007, 28th July, 2007 and 3rd September, 2007 shall form part of the

agreement. Admittedly the written agreement between the parties does

not stipulate that service tax shall be payable to the petitioner by the

respondent.

On the basis of the letter dated 17th September, 2007 it is

contended that since the letter dated 28th July, 2007 forms part of the

agreement and the said letter stipulates about applicability of the

service tax, therefore, there are no disputed question of facts and the

liability of the service tax of the respondent to the petitioner can be

adjudicated in a writ petition under Article 226 of the Constitution of

India.

The learned counsel for the petitioner has relied on AIR 1983 SC

848, Gujarat State Financial Corporation v. M/s. Lotus Hotels Pvt. Ltd.

to contend that the statutory authorities cannot commit breach of a

solemn undertaking on which other side has acted and then contend

that the party suffering by the breach of contract may sue for damages

but cannot compel specific performance of the contract. Perusal of the

precedent relied on by the petitioner reveals that it is distinguishable in

as much as in the Gujarat State Financial Corporation (Supra) the said

corporation had entered into an agreement in the performance of its

statutory duty to advance loan to a company and acting on the

undertaking, that company had proceeded to undertake and execute

project of setting up four star hotel and incurred huge expenses and

suffered liabilities to set up the hotel. The Gujarat State Financial

Corporation had declined to advance loan to the company and the plea

was taken that the agreement to advance the loan cannot be specifically

enforced and the company may be entitled to recover damages which

contention was rejected by the Supreme Court. The case of the

petitioner is apparently distinguishable as petitioner is claiming service

tax from the respondent, where the respondent/DDA is denying any

liability to pay the service tax as the liability of the payment of service

tax is not stipulated in the agreement between the parties and even the

correspondence between the parties which had been made part of the

agreement by letter dated 17th September, 2007 do not impose the

liability of the service tax on the respondent. By letter dated 28th July,

2007 on which the petitioner relies to claim service tax, did not admit

the liability of DDA to pay the service tax as by said letter the petitioner

had demanded the respondent to clarify and confirm that the quoted

rates given by the petitioner will be exclusive of service tax and the

liability thereon shall be applicable to the DDA and will be reimbursed

by DDA as per actual to the petitioner. This was one of the conditions

which was claimed by the petitioner but which was not accepted by the

respondent. The learned counsel for the petitioner is unable to show

any letter or demand after 28th July, 2007 whereby the respondent DDA

had admitted their liability to pay the service tax. In the circumstances

on the basis of the documents relied on by the petitioner it cannot be

held that the respondent had admitted its liability of the service tax or

the respondent is liable for the claim of the petitioner for an amount of

Rs.60,19,872/- for service tax. Therefore, it cannot be held that the

petitioner is entitled for the said amount from the respondent. If the

said amount is not admitted by the respondent to be payable by the

DDA, the alleged liability of the respondent to pay 12% simple interest

is also not admitted. If on the basis of written agreement and

documents, the petitioner is not entitled for any amount on account of

service tax, the petitioner shall not be entitled for the service tax from

the respondent on account of any oral evidence which may be adduced

by the petitioner, as such an evidence prima facie, shall be not

acceptable under Section 91 of the Evidence Act.

This cannot be disputed that as to when a discretionary

jurisdiction is to be exercised or refused to be exercised by the High

Court, it is to be determined having regard to the facts and

circumstances of the case. The High Court can entertain a writ petition

if it is shown that there is something more which goes to the root of the

jurisdiction or something which would show that it would be a case of

palpable injustice to the writ petitioner to force him to adopt the

remedies provided under the civil law. Admittedly in the present case

the petitioner has not contended that any provision of law is ultra vires

and has not sought quashing of the same nor it can be inferred that the

denial of the alleged payment to petitioner of service tax and the interest

thereon is in violation of any written agreement or is in violation of any

principles of natural justice. In ABL International Ltd v. Export Credit

Guarantee Corporation of India Ltd, (2004) 3 SCC 553 it was held that

the High Court having regard to the facts of the case, has a discretion to

entertain or not to entertain the writ petition and it is the Court that

has imposed upon itself certain restrictions in the exercise of this

power. The Supreme Court had held at page 572 in Para 28 as under:-

"28. However, while entertaining an objection as to the maintainability of a writ petition under Article 226 of the Constitution of India, the court should bear in mind the fact that the power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provisions of the Constitution. The High Court having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. The Court has imposed upon itself certain restrictions in the exercise of this power. (See Whirlpool Corpn. v. Registrar of Trade Marks.) And this plenary right of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons, for which the Court thinks it necessary to exercise the said jurisdiction."

In the present facts and circumstances the agreement between

the parties does not stipulate that the respondent is liable for the

service tax, the correspondence on which the petitioner rely do not

reflect any admission on the part of the respondent to pay the service

tax nor there is any admission to pay the interest. The petitioner relies

on the liability of the service tax by the respondent on the basis of

service tax paid in case of some other contractor.

Considering the entirety of facts and circumstances the disputes

between the parties, disputes involve substantial disputed questions of

facts which may not be determined without recording the detailed

evidence of the parties and their cross examination.

In the circumstances, the petitioner is not entitled to invoke the

remedy of invoking writ jurisdiction under Article 226 of the

Constitution of India for recovery of alleged amount of Rs.60,19,872/-

on account of service tax with interest at 12% from the date of first

payment of the service tax in the facts and circumstances of this case.

The writ petition is, therefore, dismissed. The petitioner shall, however,

be entitled to take his other civil remedies, if available, to him in

accordance with law. Parties are left to bear their own costs in the facts

and circumstances of the case.

September 04, 2009                                ANIL KUMAR, J.
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