Facts of the Case

The petitioner had entered into various works agreements with government respondents for execution of works in Kurnool District, and completed the works as per the agreed terms, with the measurements recorded by the respondent authorities without noting any defects. While the value of work executed was paid, the respondents did not release the Earnest Money Deposit (EMD), other withheld amounts, and the GST component relating to the works, even after the defect liability period had expired. Despite repeated representations by the petitioner, the amounts remained unpaid, leading to this writ petition before the Andhra Pradesh High Court seeking their release.

Issues Involved

  1. Whether the respondents were justified in continuing to withhold the EMD, other withheld amounts and the GST component relating to completed works after expiry of the defect liability period.

Petitioner's Arguments

  • The works had been completed as per the terms of the agreements and measured without any noted defects.
  • Despite completion of the defect liability period, the EMD, withheld amounts and GST component were not released despite repeated approaches to the respondents.

Respondent's Arguments

  • The learned Government Pleader submitted that the respondents were, in fact, ready to pay the amounts due to the petitioner.

Court Order / Findings

  • The Court found no justification for withholding the EMD, withheld amounts, and the GST component even after completion of the defect liability period.
  • It directed the respondents to release the EMD, withheld amounts and the GST component due to the petitioner within four weeks from the date of receipt of the order.
  • The writ petition was disposed of with no order as to costs, and pending miscellaneous petitions were closed.

Important Clarification

This order is essentially a contract-payment ruling: the Court simply enforced release of amounts the government itself admitted were due, one component of which happened to be labelled the GST component of the contract price. It does not decide any question of GST classification, rate, or input tax credit — it is a reminder that once a government department concedes an amount is payable, courts will not permit indefinite withholding on unexplained grounds.

Sections Involved

  • Article 226, Constitution of India — writ jurisdiction invoked for enforcement of contractual dues.
  • No specific provision of the Central Goods and Services Tax Act, 2017 was interpreted; the GST component was simply one head of the payment due under the works contract.

Decision – In Favour of

Decided in favour of the petitioner; the respondents were directed to release the EMD, withheld amounts, and GST component within four weeks.

Case Details

Court: High Court of Andhra Pradesh
Case No.: Writ Petition No. 26148 of 2023
Coram: Hon'ble Sri Justice Venkateswarlu Nimmagadda
Date of Order: 03.11.2023

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