GST transition under contract clauses shifts additional tax burden to the employer, while escalation disputes proceed through contractual remedies
Case-Laws
GST
Clause 43.2 requires contract-price adjustment where taxes, duties or levies change during contract execution and the change is not already reflected in the price. Accordingly, GST introduced during subsisting works contracts shifted the additional tax burden to the employer, supported by the contractual terms and the applicable Government Order, and the tax component was directed to be reimbursed. Retention amounts could not be withheld merely because audit objections remained pending; they were to be refunded with commercial-rate interest unless appropriation was otherwise justified. Claims for price escalation or adjustment involving disputed facts were not determined in writ proceedings and were left to the contractual dispute-resolution mechanism and other remedies.
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