The petitioners had entered into an agreement with the 3rd respondent for construction of class rooms, compound walls etc., under the SSA Scheme. On completion of the work, they approached the 3rd respondent for payments that were due to them in terms of the agreement. The 3rd respondent, acting on Ext.P6 communication received from the State Project Director, who in turn referred to an audit objection received from the Accountant Generals office, withheld amounts towards tax and welfare fund dues from the payments made to the petitioners. In the writ petition, the action of the 3rd respondent in withholding the amounts due to the petitioners, under the agreements entered into with them, is impugned.
2. A counter affidavit has been filed on behalf of the 2nd respondent wherein it is stated that the withholding of various amounts that were otherwise due to the petitioners was done only on account of the observations made by the Accountant General (Audit), in respect of non-collection of statutory deduction of sales tax and workers welfare fund contribution from the work bills pertaining to civil works under the SSA Scheme. It was pursuant to the said observations of the Accountant General (audit) that the 3rd respondent sought to withhold amounts from the payments due to the petitioners.
3. I have heard Sri.R.K.Muralidharan, the learned counsel for the petitioners and the learned Government Pleader appearing on behalf of the respondents.
4. On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, I find that the inter se rights between the petitioner and the 3rd respondent are determined by the terms of the agreement entered into between them. In the agreement, there is no mention with regard to the withholding of any amount towards tax liability or welfare fund dues. There is nothing in the pleadings that would suggest that there was any demand received by the 3rd respondent towards statutory dues, either under the Kerala General Sales Tax Act or under the Construction Workers Welfare Fund Act. In that view of the matter, I do not see any justification in the 3rd respondent withholding amounts that are otherwise due to the petitioners, more so in the absence of any clause in the agreement entered into between the petitioners and the 3rd respondent that would enable the 3rd respondent to withhold the said amounts.
Resultantly, the writ petition is allowed by declaring that the 3rd respondent is not entitled to withhold any amount towards sales tax and welfare fund contribution, from the amounts to be disbursed to the petitioners in terms of the agreements entered into with them. The amounts withheld by the 3rd respondent shall be released to the petitioner within a period of two months from the date of receipt of a copy of this judgment.
mns/ A.K.JAYASANKARAN NAMBIAR JUDGE