Facts of the Case

Nataraj Reddy, a PWD Class-I contractor from Koppal district, sought a mandamus directing the PWD department to settle and finalise the bills for a completed civil work, including the amount due towards a pump house and pump motor installation, and to refund the Fixed Security Deposit (FSD) of Rs.1,41,000/-.

The dispute concerned whether certain items (installing the pump house and pump motor) fell within the scope of the awarded civil work, and whether the contractor was entitled to be paid the GST component along with the base contract value, once the civil work itself was admittedly completed within time.

The Court, excluding the cost of installing the pump house and pump motor (which appears to have fallen outside the scope of the civil work as such), held the petitioner legally entitled to recover the amount due for the civil work completed, including GST, and to the FSD amount, since the respondents had unequivocally admitted the civil work was completed on time.

Issues Involved

  1. Whether the petitioner-contractor was entitled to payment for the completed civil work, including GST, excluding the disputed pump house/pump motor installation cost.
  2. Whether the petitioner was entitled to refund of the Fixed Security Deposit of Rs.1,41,000/-.

Petitioner's Arguments

  • The civil work under the contract had been duly completed within the stipulated time, and the department was legally bound to settle the final bill, including the GST component, and refund the FSD.

Respondent's Arguments

  • The respondents' specific defence is not detailed at length in the extracted portions beyond disputing liability for the pump house/pump motor installation cost.

Court Order / Findings

  • Excluding the cost of installing the pump house and pump motor, the petitioner was held legally entitled to recover the amount due for the civil work completed, and was also entitled to claim GST on that amount.
  • Since the respondents had unequivocally admitted that the civil work was completed within the stipulated time, the petitioner was also held entitled to the FSD amount of Rs.1,41,000/-.
  • The respondents were directed to consider the petitioner's representation and issue the final bill in accordance with law within two months, in line with the stand taken in their own statement of objections.

Important Clarification

This order recognises, as a matter of contract law, that GST forms a legitimate part of a contractor's bill and must be paid along with the base work value — it is not a ruling that decides any question of GST classification, rate, or liability under GST statutes themselves.

Sections Involved

  • Constitution of India, 1950 — Article 226 (writ of mandamus for contractual dues against a state instrumentality)

Decision – In Favour of

Decided in favour of the petitioner — the writ petition was allowed, with a direction to settle the final bill (including GST) and process the FSD refund within two months.

Case Details

  • Court: High Court of Karnataka, Dharwad Bench
  • Case No.: Writ Petition No.100878 of 2023 (GM-RES)
  • Neutral Citation: 2023:KHC-D:10409
  • Coram: Hon'ble Mr. Justice Sachin Shankar Magadum
  • Date of Order: 12.09.2023

Link to Download the Order

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