Facts of the Case

G. Chenchu Krishnama Naidu, a civil contractor, filed a writ petition before the Andhra Pradesh High Court against the State of Andhra Pradesh's Irrigation & CAD Department, seeking release of amounts withheld from his final bills for completed works — including withheld GST amounts, Security Deposit (FSD), and Earnest Money Deposit (EMD).

The petitioner had completed the works to the satisfaction of the department, but payment had not been released; the delay was causing him financial hardship.

The respondents' counsel produced written instructions explaining that the bills were pending release of 'BRO' (Budget Release Order) from the Government, and that regular requests were being made to release funds so payment could be processed through the Pay and Accounts Officer.

The matter was disposed of by a Single Judge on 04.10.2023.

Issues Involved

  1. Whether the respondents should be directed to release the withheld bill amounts, including the GST component, that were due and payable to the petitioner for completed works.

Petitioner's Arguments

  • The petitioner contended that he had completed the works to the department's satisfaction, that the bills remained unpaid, and that the withholding of amounts, including GST, Security Deposit and EMD, was unjust and causing him financial crisis.

Respondent's Arguments

  • The respondents did not dispute completion of the works or non-payment, but explained the delay as being due to non-release of the Budget Release Order (BRO) by the State Government, with efforts underway to secure release of funds.

Court Order / Findings

  • Given the undisputed facts of completed work and non-payment, the Court held that the respondents' failure to pay the bill amount was 'unjust, not tenable', but was inclined to grant the respondents some further time to make payment given the budgetary constraints explained.
  • The writ petition was disposed of with a direction to the respondents to arrange payment of the amounts due, after effecting statutory deductions, within two months from receipt of a copy of the order, with no order as to costs.

Important Clarification

This order is about release of contractual dues owed to a government works contractor — the GST component is simply one part of the total bill amount that was being withheld, not a substantive GST-law question that the Court examined or decided. Statutory deductions (which could include tax deductions at source) were left to be effected as applicable when payment is made.

Sections Involved

  • Constitution of India, 1950 – Article 226 (writ of mandamus for release of contractual dues)
  • General conditions of government works contracts

Decision – In Favour of

The writ petition was disposed of in favour of the petitioner-contractor to the extent that the respondents were directed to release the withheld payment within two months; the Court did not decide any separate legal controversy relating to GST.

Case Details

  • Court: High Court of Andhra Pradesh at Amaravati
  • Case No.: WP No. 22264 of 2023
  • Coram: Justice Ninala Jayasurya
  • Date: 04.10.2023

Link to Download the Order

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