2018 (1) TMI 919 - HC - Service Tax

Recovery of alleged dues pursuant to a contractual work - outstanding dues of service tax - jurisdiction under Article 226 - Held that - The question has been considered specifically in Hindustan Petroleum Corporation Limited and another Vs. Dolly Das 1999 (4) TMI 615 - SUPREME COURT wherein Court said that in absence of any constitutional or statutory rights being involved, a writ proceeding would not lie to enforce contractual obligations even if it is sought to be enforced against State or to avoid contractual liability arising thereto. In the absence of any statutory right, Article 226 cannot be availed to claim any money in respect of breach of contract or tort or otherwise. Mandamus sought by petitioner is nothing but grant of a money decree in extraordinary equitable jurisdiction under Article 226 which ought not to have been granted. Petition dismissed with costs.

Summary

Issues:
1. Maintainability of a writ petition under Article 226 for recovery of money pursuant to a contract.

Analysis:
The petitioner sought a writ order to command the respondents to make payment for outstanding dues and arrears of bills. The court noted that the alleged dues were part of a contract between the petitioner and the respondents. The petitioner relied on a Supreme Court decision regarding the payment of sales tax in a contractual context. However, the court emphasized that a writ petition under Article 226 is not maintainable for recovery of money pursuant to a contract. The court referred to various judgments to support this position, highlighting that contractual disputes should be resolved through civil suits or arbitration, not via writ petitions.

The court cited the Hindustan Sugar Mills case to emphasize that governmental entities should act ethically and justly in contractual matters, even if not legally obligated. However, this principle does not translate into a right to seek relief through a writ petition under Article 226. The court reiterated that contractual disputes, including interpretation and enforcement, should be addressed through civil suits or arbitration, not through writ petitions. The court dismissed the writ petition as devoid of merits and imposed costs on the petitioner.

In conclusion, the court held that the mandamus sought by the petitioner was essentially a request for a money decree, which is not appropriate in the extraordinary equitable jurisdiction under Article 226. The court emphasized that disputes related to contracts, including payment disputes, should be resolved through civil suits or arbitration, not through writ petitions. The court dismissed the writ petition, highlighting that the petitioner's right to payment was seriously disputed, making it unsuitable for examination in writ jurisdiction under Article 226.

Overall, the judgment underscores the principle that writ petitions under Article 226 are not the appropriate avenue for resolving contractual disputes or seeking monetary remedies. The court's decision was based on established legal precedents and principles governing the jurisdiction of writ petitions in matters involving contractual obligations and payment disputes.