Facts of the Case

This is a government-contract payment dispute, not a GST law case — the 'GST component' referred to here is simply the GST portion of the contractor's bill for completed works. The petitioner, a works contractor who had executed various works for government respondents in Kurnool District, completed the contracted works, which were duly recorded in measurement books without any defects being noted, and was paid the base execution amount. However, the Earnest Money Deposit, other Withheld Amounts, and the GST component relating to the completed works were not released even after the defect liability period had ended. Despite repeated representations, the amounts remained unpaid, prompting the writ petition seeking their release.

Issues Involved

  1. Whether the respondents were justified in continuing to withhold the Earnest Money Deposit, Withheld Amounts, and GST component after the defect liability period had ended.

Petitioner's Arguments

  • The works were completed as per the agreement and recorded without any defects, and there was no justification for continuing to withhold the EMD, Withheld Amounts, and GST component even after the defect liability period was over.

Respondent's Arguments

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

Court Order / Findings

  • Noting that there was no justification for withholding the amounts even after completion of the defect liability period, and given the respondents' own readiness to pay, the Court directed release of the Earnest Money Deposit, Withheld Amounts, and GST component within four weeks.
  • The writ petition was disposed of with no order as to costs.

Important Clarification

This order does not decide any question of GST rate, classification, or liability — the 'GST component' was simply part of a construction contractor's bill that the government agency was contractually bound to pay along with the base amount, once work was satisfactorily completed.

Sections Involved

  • Constitution of India — Article 226 (writ for release of contractual dues)

Decision – In Favour of

Decided in favour of the petitioner; release of all withheld amounts, including the GST component, was directed within four weeks.

Case Details

Court: High Court of Andhra Pradesh at Amaravati  |  Case No.: Writ Petition No. 26114 of 2023  |  Coram: Hon'ble Sri Justice Venkateswarlu Nimmagadda  |  Date: 3 November 2023

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