Facts of the Case

The petitioner, a contractor who had executed various works in Kurnool District under agreements with the State authorities, filed a writ petition seeking release of the Earnest Money Deposit (EMD), withheld amounts, and the GST component relating to those works, all of which remained unpaid even after the defect liability period had expired and the works had been duly measured and recorded without any noted defects.

The petitioner had approached the respondents on several occasions seeking payment, without success, and was left with no option but to seek relief from the Court.

Issues Involved

  1. Whether the respondent-authorities were justified in withholding the EMD, withheld amounts, and the GST component due on completed works despite the expiry of the defect liability period.
  2. What relief the petitioner was entitled to for the delay in payment.

Petitioner's Arguments

  • The works had been completed as per the agreement, measured, and recorded without any defects being noticed.
  • The amount for execution of works had been paid, but the EMD, withheld amounts, and GST component remained unreleased even after completion of the defect liability period.
  • Repeated approaches to the respondents for payment had not yielded any result.

Respondent's Arguments

  • The learned Government Pleader submitted that the respondents were ready to pay the amounts due to the petitioner — no substantive defence was raised against the claim itself.

Court Order / Findings

  • Noting that there was no justification for withholding the EMD, withheld amounts and GST component even after completion of the defect liability period, and given the respondents' own submission that they were ready to pay, the Court directed release of these amounts within a period of four weeks from receipt of the order.
  • There was no order as to costs, and pending miscellaneous petitions were closed.

Important Clarification

This order does not interpret any GST provision or decide any question about how GST is to be computed or charged on works-contract payments — it simply directs payment of amounts (including a GST component) that the State itself did not dispute owing to the contractor. It is a payment-recovery order arising from a delayed release of contractual dues, not a GST-law ruling.

Sections Involved

  • Article 226 of the Constitution of India, 1950 (writ of mandamus for release of contractual dues)
  • Terms of the works-contract agreements between the petitioner and the State authorities (contractual, not a substantive GST-law provision)

Decision – In Favour of

Decided in favour of the petitioner — the Court directed release of the EMD, withheld amounts, and GST component within four weeks, without deciding any contested question of GST law.

Case Details

Court: High Court of Andhra Pradesh at Amaravati
Case No.: Writ Petition No. 26110 of 2023
Coram: Hon'ble Sri Justice Venkateswarlu Nimmagadda
Date of Order: 03.11.2023

Link to Download the Order

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