Facts of the Case

The petitioner filed the writ petition under Article 226 of the Constitution of India seeking a declaration that the respondents’ inaction in releasing payment of ₹1,13,96,436 was arbitrary and illegal.

The amount was claimed towards works executed by the petitioner for the “Creation of awareness on the welfare of Schemes of Department during the ‘WORLD ADIVASI DAY’ celebrations through Pillar boards and Hoardings.”

The works were executed pursuant to the sanction order issued by the 3rd respondent through Proc. Rc. No. SOW03-12037-2-2018 dated 10.01.2019.

Despite execution of the works and the outstanding amount becoming payable, the petitioner alleged that the respondents failed to release the balance payment of ₹1,13,96,436. Consequently, the petitioner approached the High Court seeking a direction for release of the admitted outstanding amount.

Issues Involved

The principal issues before the Court were:

  1. Whether the respondents’ failure to release the outstanding payment of ₹1,13,96,436, despite the amount having been admitted and processed, amounted to arbitrary and illegal inaction.
  2. Whether the petitioner was entitled to a direction under Article 226 of the Constitution of India requiring the concerned authorities to release the pending amount.
  3. Whether the pendency of bills with the Finance Department could justify continued non-payment when the 3rd respondent had admitted the amount and repeatedly raised CFMS IDs.
  4. Whether the amount should be released in accordance with the invoices raised by the 3rd respondent after the relevant deductions, including GST and Income Tax.

Petitioner’s Arguments

The petitioner’s case was that an amount of ₹1,13,96,436 remained payable for works executed pursuant to the sanction proceedings dated 10.01.2019.

The petitioner contended that the continued failure of the respondents to release the amount was arbitrary and illegal, particularly when the work had been executed in pursuance of the sanction order issued by the competent authority.

Accordingly, the petitioner sought a consequential direction requiring the respondents to release the balance outstanding amount of ₹1,13,96,436.

Respondents’ Arguments

After notice, the 3rd respondent filed a counter affidavit.

Significantly, the 3rd respondent admitted the amount and stated that proceedings dated 10.01.2019 bearing Rc. No. SOW03-12037-2-2018 had been issued for ₹1,13,96,436.

It was further stated that the 3rd respondent had submitted the bill through CFMS ID No. 2018-2 2232529 dated 18.01.2019 after deducting GST and Income Tax.

Thereafter, CFMS IDs were raised for each of the financial years 2019-20, 2020-21, 2021-22 and 2022-23.

Finally, CFMS ID No. 203839 was raised for the year 2022-23.

The respondents’ stand was that the bills were pending with the 2nd respondent, namely the Finance Department, which was required to make payment of the amount to the petitioner.

Court Order / Findings

The Court took note of the specific submissions contained in the counter affidavit filed by the 3rd respondent.

Since the amount had been admitted and the bills had been processed and raised through the relevant CFMS mechanism, the Court directed respondents Nos. 1 and 2 to release the amount in accordance with the invoices raised by the 3rd respondent.

The Court further directed that the amount be paid to the petitioner within a period of eight weeks from the date of receipt of a copy of the order.

Accordingly, the writ petition was disposed of without any order as to costs.

The Court also directed that any pending miscellaneous application would stand closed.

Important Clarification

This decision is important because the Court acted upon the respondents’ own admission regarding the outstanding amount and the fact that bills had already been raised and processed through CFMS.

The judgment indicates that where:

  • the liability is admitted by the concerned authority;
  • sanction proceedings have already been issued;
  • invoices or bills have been raised;
  • statutory deductions such as GST and Income Tax have been accounted for; and
  • payment remains pending with the Finance Department,

the Court may exercise jurisdiction under Article 226 and direct release of payment within a fixed time period.

The order does not adjudicate any substantive dispute regarding the levy, rate, classification, exemption, input tax credit or recovery of GST. The reference to GST is confined to the factual statement in the counter affidavit that the bill had been submitted after deducting GST and Income Tax.

Sections / Legal Provisions Involved

Article 226 of the Constitution of India – Writ jurisdiction of the High Court.

GST Reference – The judgment records that the bill was submitted after deducting GST; however, no specific section of the CGST Act, 2017 or the relevant State GST Act was adjudicated upon in the order.

Income Tax Reference – The judgment records deduction of Income Tax from the bill; however, no specific provision of the Income-tax Act, 1961 was adjudicated upon.

Case Law Position

The present order turns primarily on the respondents’ admission of the payable amount and the pendency of processed bills with the Finance Department. No separate precedent or reported case law has been cited or discussed in the judgment.

Therefore, no unrelated judicial precedent should be attributed to this order. Its legal significance lies in the High Court’s exercise of writ jurisdiction under Article 226 to direct time-bound payment where the governmental authority itself admitted the amount and the payment process had already been initiated.

Link to download the order -

https://www.mytaxexpert.co.in/uploads/1783319329_1204compressed.pdf

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