STATE OF ORISSA versus M/S. B. ENGINEERS & BUILDERS LTD. & ORS.

STATE OF ORISSA versus M/S. B. ENGINEERS & BUILDERS LTD. & ORS.

The contractor was entitled to reimbursement under Clause 45.2 of the General Conditions of Contract of sales tax levied and paid in respect of the taxable turnover of the works contracts (i.e., sales tax assessed after deduction of labour and service charges under Section 5(2)(AA) of the Orissa Sales Tax Act); Clauses 13.3 ITB and 45.1 GCC did not negate the specific reimbursement provision; the impugned Circular dated 07.11.2001 was contrary to the contract and statutory scheme and is disapproved/quashed; appeal dismissed and High Court order directing reimbursement upheld.

Parties
Appellant: State of Orissa; Respondent: M/s. B. Engineers & Builders Ltd. & Ors.
Jurisdiction
India
Judgment Date
05 June 2020
Procedural Posture
Civil Appeal (special Leave) / Appeal From High Court Judgment and Order Dated 05.08.2008 in W.p.(c) No.8857 of 2003; Final Disposal by Supreme Court
Outcome
Appeal dismissed
Legal Topics
Works Contracts, Sales Tax, Reimbursement of Taxes, Contract Interpretation, Validity and Effect of Administrative Circulars
Tax Law Contract Law Constitutional Law Administrative Law Works Contracts Sales Tax Reimbursement of Taxes Contract Interpretation +1 more

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Parties

State of Orissa

Appellant

M/s. B. Engineers & Builders Ltd. & Ors.

Respondent

Procedural Posture

Civil Appeal (special Leave) / Appeal From High Court Judgment and Order Dated 05.08.2008 in W.p.(c) No.8857 of 2003; Final Disposal by Supreme Court

Legal Issues

  1. 1 Whether the contractor is entitled to reimbursement under Clause 45.2 of the GCC of sales tax levied in respect of works contracts
  2. 2 Meaning and effect of the phrase "completed item of work" in Clause 45.2 in the context of works contracts
  3. 3 Whether Clauses 13.3 of the Instructions to Bidders and 45.1 of the GCC preclude reimbursement of sales tax

Ratio Decidendi

The contractor was entitled to reimbursement under Clause 45.2 of the General Conditions of Contract of sales tax levied and paid in respect of the taxable turnover of the works contracts (i.e., sales tax assessed after deduction of labour and service charges under Section 5(2)(AA) of the Orissa Sales Tax Act); Clauses 13.3 ITB and 45.1 GCC did not negate the specific reimbursement provision; the impugned Circular dated 07.11.2001 was contrary to the contract and statutory scheme and is disapproved/quashed; appeal dismissed and High Court order directing reimbursement upheld.

Court Disposition

Appeal dismissed

Orders

  • High Court judgment and order dated 05.08.2008 upheld
  • Impugned Circular dated 07.11.2001 disapproved/quashed to the extent it denied reimbursement under Clause 45.2