Facts of the Case

The petitioner, S.R. Rajan, was the successful tender bidder for running the 'coconut counter' located at the eastern nada of the Ganapathi Temple, which is annexed to the Sree Krishna Temple, Guruvayoor, for the contractual period spanning from November 1, 2019, to October 31, 2020. The total tender amount accepted was ₹78,00,000. To formalize this arrangement, the petitioner remitted an aggregate sum of ₹92,82,000, which fundamentally integrated the core tender value along with ₹14,04,000 as Goods and Services Tax (GST) at an 18% rate, and ₹78,00,000 as an associated cess. Following this payment, the petitioner executed an agreement (Exhibit P1) with the Guruvayoor Devaswom Managing Committee (GDMC) and initiated operations on November 1, 2019.

However, following the unprecedented global outbreak of the COVID-19 pandemic, the Central Government declared a stringent nationwide lockdown in March 2020. Prior to this, on March 10, 2020, the GDMC issued a restrictive circular completely banning Darshan for devotees and sealing off the temple premises to prevent viral transmission. Consequently, the petitioner was forced to shut down the coconut counter operations entirely, which destroyed the commercial purpose of the contract.

The petitioner submitted an initial representation on April 13, 2020, seeking a three-month extension of the tender period, but received no response. Concurrently, the GST Consultant of the Devaswom notified the committee that coconuts are legally exempted from GST, prompting the petitioner to demand a full refund of the collected GST and cess. The GDMC originally passed Exhibit P8 resolution on November 24, 2020, deciding to refund the proportionate tender amount for the non-operative period, subject to approval from the Devaswom Commissioner. However, while the approval was pending, the GDMC convened a meeting on December 17, 2021, and abruptly passed Resolution No. 17 (Exhibit R2(b)), completely reversing its previous stance and canceling the refund decision without providing any prior notice or hearing to the petitioner.

Issues Involved

  • Whether the Guruvayoor Devaswom Managing Committee (GDMC) violated the fundamental principles of natural justice by unilaterally canceling its prior decision (Exhibit P8) to refund the proportionate tender money via Resolution No. 17 (Exhibit R2(b)) without serving a show-cause notice or affording an opportunity of being heard to the petitioner.
  • Whether a successful tenderer is legally entitled to a proportionate refund of license/tender fees and associated tax deposits when contract performance becomes completely impossible due to state-enforced administrative closures during a pandemic lockdown.
  • Whether the collection and retention of an 18% GST and cess component on the sale of coconuts within temple premises is sustainable under the law if the underlying commodity is exempted from the tax net.
  • What is the mandatory scope of statutory approval by the Devaswom Commissioner under Section 10 of the Guruvayoor Devaswom Act, 1978, concerning financial settlements and resolutions resolved by the Managing Committee.

Petitioner’s Arguments

  • Violation of Natural Justice: The petitioner argued that the impugned resolution (Exhibit R2(b)) dated December 17, 2021—which directly stripped away a recorded financial entitlement—was formulated behind his back, without any administrative notice, thereby rendering it legally void.
  • Frustration of Purpose and Equity: Due to the state-mandated lockdown and the absolute closure of the Sree Krishna Temple premises to public devotees, it was physically and legally impossible to run the coconut counter, creating a valid ground for a proportionate refund of the deposited fee.
  • Illegal Retention of Tax: Relying heavily on a communication issued by the Chief Finance and Accounts Officer (Exhibit P3) and the opinion of the committee's own GST consultant, the petitioner argued that coconuts are exempted items under the GST regime. Therefore, the collected tax component of ₹14,04,000 and cess of ₹78,000 must be refunded immediately, particularly if it had not yet been deposited into the government exchequer.
  • Distinction of Precedents: The petitioner claimed that the adverse judicial rulings relied upon by the Devaswom Board operated on entirely distinct factual matrices and could not blindside his specific claims without an active evaluation during a personal hearing.

Respondent’s Arguments

  • Application of Binding Precedents: The respondents (GDMC) argued that their subsequent reversal of the refund policy was mandated by law to align with the binding judgments of the High Court of Kerala in Harikumar G. v. Travancore Devaswom Board [2021 KHC 130] and associated rulings. They contended that commercial contract losses arising out of pandemic restrictions do not automatically entitle a bidder to a waiver or refund.
  • Lack of Final Statutory Sanction: The respondents pointed out that the initial resolution to refund the proportionate amount (Exhibit P8) was explicitly conditional and subject to final administrative approval from the 4th respondent (the Devaswom Commissioner). Because this approval was never formally granted under Section 10 of the Guruvayoor Devaswom Act, 1978, no vested right had accrued to the petitioner.
  • Return of Security Deposit: The Devaswom clarified that they acted in good faith by returning the interest-free security deposit to the petitioner immediately upon the expiration of the formal contract period.

Court Orders & Findings

The Division Bench of the High Court of Kerala, comprising Hon'ble Mr. Justice Anil K. Narendran and Hon'ble Mr. Justice P.G. Ajithkumar, observed that the core facts regarding the lack of administrative notice were undisputed. The learned Standing Counsel for the GDMC candidly admitted before the bench that Exhibit R2(b) (Resolution No. 17), which recalled the refund framework, was passed without giving any notice or hearing to the petitioner.

The High Court ruled that when an order or resolution severely affecting the financial stakes of an individual is passed in complete violation of the principles of natural justice, it is liable to be struck down on that sole ground, without even entering into the deeper legal or factual thicket of contractual liabilities.

Consequently, the High Court ordered the following:

  • Quashing of the Impugned Order: The court set aside the GDMC's restrictive resolution dated December 17, 2021 (Exhibit R2(b)) due to a clear violation of natural justice.
  • Remand for Reconsideration: The court directed the GDMC to re-evaluate the entire matter afresh, specifically looking into the petitioner's exact liability regarding GST and cess deductions, after granting the petitioner a fair opportunity of being personally heard.
  • Submission of Written Statements: The petitioner was granted liberty to submit an extensive written brief detailing his legal and factual arguments before the committee.
  • Statutory Compliance and Timeline: The GDMC was instructed to formulate a well-reasoned order and present it before the 4th respondent Commissioner for mandatory statutory approval under Section 10 of the Guruvayoor Devaswom Act, 1978. The entire exercise was mandated to be concluded expeditiously within a strict timeline of two months from the date of production of the certified copy of the judgment.

Important Clarification

This judgment reinforces a vital administrative law principle: statutory boards, including Devaswom Managing Committees, cannot use subsequent judicial precedents to secretly revoke previously granted administrative reliefs or resolutions without notifying the affected party. Even when correcting an alleged legal error, adherence to procedural fairness and the Audi Alteram Partem rule remains mandatory. Furthermore, the ruling emphasizes that any financial settlement or modifications concerning Devaswom contracts must navigate the formal approval channel of the Devaswom Commissioner as mandated under Section 10 of the Guruvayoor Devaswom Act, 1978, to achieve legal finality.

Sections Involved

  • Article 226 of the Constitution of India (Inherent writ jurisdiction for the enforcement of fundamental and legal rights).
  • Section 10 of the Guruvayoor Devaswom Act, 1978 (Governing powers, duties, and the mandatory requirement of Commissioner approval for Managing Committee decisions).
  • Central Goods and Services Tax (CGST) Act, 2017 (Pertaining to exemptions on specific commodities like coconuts).

Link to download the order -https://mytaxexpert.co.in/uploads/1783315884_927compressed.pdf

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