WP(C) 3978/2010 BEFORE HON’BLE MR. JUSTICE AMITAVA ROY The petitioner is aggrieved by the denial of the respondent/Railways to release an amount of Rs. 11,13,079/- deducted from its running bills for the works executed by it. I have heard Mr. S. S. Dey, learned counsel for the petitioner and Ms Chakrabort y, learned Standing Counsel, N.F. Railways. The thumb-nail facts necessary for the disposal of the instant proceeding are th at in response to Special Limited Tender no. CE/CON/GC/APDJ/MB/SLT/2005/01(R&C) by the Respondent/Railways for the execution of the works mentioned therein, the petitioner submitted its original offer on 18.4.2005. After full scale negotiat ion, its final offer was quoted on 28.4.2005. Meanwhile, the Assam General Sales Act, 1993(for short hereinafter referred to as the AGST Act) was replaced by th e Assam Value Added Tax, Act 2003(for short hereinafter referred to as the VAT, Act) as amended. Admittedly the latter enactment was enforced on 1.5.2005. The petitioner, while quoting its offer had specified that if VAT is leviable on the transaction, the resultant extra amount would be payable by the Railways. I n response thereto, the Respondent/Railways accepted the said stipulation and ag reed that the petitioner would be entitled to receive the benefits on that accou nt as per the extant provisions, if due to it and backed by documentary evidence . This was on 3.5.2005. The petitioner duly executed the works to the satisfacti on of the Respondent/Railways, which is evident from the completion certificate issued on 26.7.2006. Meanwhile, however, the Respondent/Railways deducted the le vy under the VAT, Act from the running bills of the petitioner to the tune of Rs . 11,13,079/-. In support of this deduction, the petitioner has appended the rel evant certificate to that effect. As its repeated request for refund of the dedu cted amount at source, in terms of its offer, did not materialize, the petitione r is before this Court for redressal of its grievance. Whereas, Mr. Dey, submits that in face of the categorical acceptance on the part of the Respondent/Railwa ys of the petitioner’s special condition of being recompensed by any amount paya ble by way of VAT, it is entitled to be refunded/paid the amount of Rs. 11,13,07 9/-. Ms. Chakraborty, learned Standing Counsel, drawing the attention of this Co urt to Clause 2.12.1 of the terms and conditions of the contract has pleaded to the contrary. According to her the amount of levy has been rightly deducted from the petitioner’s running bills and that in view of the remedy available to it t o apply for refund of the amount from the Tax Department, the instant petition lacks its substance and ought to be dismissed on limine. She further submits th at in the teeth of the arbitration clause in the contract agreement, the presen t petition is not maintainable in law. In the opinion of this Court, the controversy can be resolved taking note of the contents of paragraph 2 of the affidavit filed by the Respondent No. 2. For a r eady reference the said paragraph is quoted hereinbelow :- That with regard to statements made in para 1,2 & 3, the answering Respondents begs to state that the statements are factually correct and not denied being mat ter of records of the petitioner regarding applicability of the provisions under VAT as per Railway’s remark which indicates that the contractor will be entitle d to get the benefits on this count as per extent provision, if so becomes due t o them in due course based on documentary evidence. However, as per 2.12 of CA, the rate quoted shall include all taxes direct or in direct leviable under Central, State or Local Bodies Act or Rules, Octroi, Tolls , Royalty monopoly, seignioroges, cess and similar imposts that may be prevailin g from time to time in respect of land, structures, and all materials supplied i n the performance of this contract. The contractors’ special condition and the Railways remarks in response thereto being also of considerable significance, the same is extracted hereinbelow ;- Spl.Limited Tender No. : CE/CON/GC/APDJ/MB/SLT /2005/01(R & C) SN Contractor’s special condition Railway remarks 1 Railway have to pay us extra for VAT if applicable to this tender. Applicability of the provisions under VAT is subject to the policy decisions of the Govt. of India. Hence, contractor will be entitled to get the benefits on th is account as per extant provisions, if so becomes due to them in due course bas ed on documentary evidence. It would be apparent from hereinabove, that the petitioner at the time of finali zation of the contract agreement had made it clear that the Railways would have to pay extra for VAT, if applicable to the transaction covered thereby. To this the Railways acknowledged its entitlement to that effect, if the amount was due to it and testified by documentary evidence. In the teeth of the special conditi on as noticed above and acted upon by the parties in the unhesitant opinion of t his Court, Clause 2.12.1 relating to tax liability as contained in the contract agreement stands suitably modified. Noticeably the authority of the Respondent Railways to deduct VAT at source is not in question in the instant proceeding. T he petitioner asserts that in view of the special condition vis-à-vis the tax li ability, its offer being in exclusion thereof, any amount on that count deducted from its bills is payable by the Railways. The contents of paragraph 2 of the a ffidavit clearly bears out the Respondent/Railways’ acceptance of the special co ndition put forward by the petitioner in this regard. That the amount of Rs. 11,13,079/- has in fact been deducted from the petitioner’s running bills is unimpeachably demonstrated by the certificates to that effect and appen ded to the writ petition. This is also admitted by the Respondent/Railways. In t hat view of the matter, the contentions raised on behalf of the Respondent/Railw ays lack persuasion. The resistance offered referring to the arbitration clause also is unconvincing. It being apparent on the face of the records that the amou nt deducted by the Respondent/Railways from the petitioner’s running bills is pa yable by them(respondent Railways) to it, this plea is of no avail. In the above view of the matter, this petition is allowed. The Respondent/Railwa y is hereby directed to release the amount of Rs. 11,13,079/- to the petitioner. As the petitioner has completed the works under the contract in question which has been acknowledged by the Respondent/Railways, as is demonstrated by the comp letion certificate issued on 27.6.06, the payment of the above amount would be m ade within one month from the date of receipt of a certified copy of this order. No costs.