Rajasthan High Court – Jodhpur
State Of Rajasthan vs M/S. Manda Developers And Builders Pvt. … on 8 August, 2025
Author: Vinit Kumar Mathur
Bench: Vinit Kumar Mathur
[2025:RJ-JD:35429-DB]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
D.B. Spl. Appl. Writ No. 181/2019
1. The State Of Rajasthan, Through The Chief Secretary, Water
Resources Department, Jaipur.
2.Chief Auditor General (Cag), Government Of Rajasthan, Jaipur.
3.The Chief Engineer, Rajasthan Water Sector Restructuring
Project (Rswrp), Water Resource Department, Jaipur.
4.The Chief Engineer, Irrigation (North), Water Resources
Division, Hanumangarh.
5.The Executive Engineer, Water Resources, South Division,
Sriganganagar.
----Petitioners
Versus
M/s. Gsco Infrastructure Pvt. Ltd., A Private Limited Company
Situated At Sco- 67, Sector 20-C, Chandigarh (U.t).
----Respondent
D.B. Spl. Appl. Writ No. 334/2019
1. State Of Rajasthan, Through The Chief Secretary, Department
Of Water Resources, Jaipur, Rajasthan.
2. The Chief Auditor General (Cag), Government Of Rajasthan,
Jaipur.
3. The Chief Engineer, Rajasthan Water Sector Restructuring
Project (Rwsrp), Department Of Water Resources, Jaipur.
4. The Chief Engineer, Irrigation Zone Jodhpur, Jodhpur.
5. The Executive Engineer, Jawai Canal, Irrigation Division,
Sumerpur, Pali (Raj.).
----Petitioners
Versus
M/s. Manda Developers And Builders Pvt Ltd., Shiv Shakti Vihar,
Opposite 220Kv Power House, Jaipur Road, Bikaner Through Its
Power Of Attorney Holder Er. Hardayal Singh S/o Shri Kripa Singh
General Manager (Technical) Of The Company.
----Respondent
D.B. Spl. Appl. Writ No. 463/2019
1. State Of Rajasthan, Through The Chief Secretary, Department
Of Water Resources, Jaipur, Rajasthan.
2. The Chief Engineer, Rajasthan Water Sector Restructuring
Project (Rwsrp), Department Of Water Resources, Jaipur.
3. The Superintending Engineer, Water Resource Circle, Pali
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(Raj.).
4. The Additional Chief Engineer, Water Resources Division,
Jodhpur (Raj.).
----Petitioners
Versus
M/s. Rameshwarlal Manaram, Through Its Partner Sh.
Rameshwarlal S/o Sh. Manaram, R/o Sarvodaya Basti, Bikaner.
----Respondent
D.B. Spl. Appl. Writ No. 501/2019
1. State Of Rajasthan, Through The Chief Secretary, Department
Of Water Resources, Jaipur, Rajasthan.
2. The Chief Auditor General (Cag), Government Of Rajasthan,
Jaipur.
3. The Chief Engineer, Rajasthan Water Sector Restructuring
Project (Rwsrp), Development Of Rajasthan, Jaipur.
4. The Additional Chief Engineer, Irrigation Zone Jodhpur,
Jodhpur.
5. The Executive Engineer, Water Resource Division, Pali (Raj.).
----Petitioners
Versus
M/s. Manda Developers And Builders Pvt. Ltd., Shiv Shakti Vihar,
Opposite 220Kv Power House, Jaipur Road, Bikaner Through Its
Power Of Attorney Holder Er. Hardayal Singh S/o Shri Kripa Singh
General Manager (Technical) Of The Company.
----Respondent
D.B. Spl. Appl. Writ No. 565/2019
1. State Of Rajasthan, Through The Chief Secretary, Department
Of Water Resources, Jaipur, Rajasthan.
2. The Chief Auditor General (Cag), Government Of Rajasthan,
Jaipur.
3. The Chief Engineer, Rajasthan Water Sector Restructuring
Project (Rwsrp), Department Of Water Resources, Jaipur.
4. The Chief Engineer, Water Resource Zone Jodhpur, Jodhpur.
5. The Executive Engineer, Jawai Canal, Irrigation Division, Sirohi
(Raj.)
----Petitioners
Versus
M/s. Gopala Ram Pema Ram, Village And Post Karmisar, Ward
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No. 2, Bikaner (Raj.) Through Its Proprietor, Pema Ram S/o Pana
Ram by caste Jat, aged about 53 years, R/o.Karmisar Ward No.6,
Bikaner (Rajasthan).
----Respondent
D.B. Spl. Appl. Writ No. 819/2019
1. State Of Rajasthan, Through The Chief Secretary, Department
Of Water Resources, Jaipur, Rajasthan.
2. The Chief Auditor General (Cag), Government Of Rajasthan,
Jaipur.
3. The Chief Engineer, Rajasthan Water Sector Restructuring
Project (Rwsrp), Department Of Water Resources, Jaipur.
4. The Chief Engineer, Irrigation Zone, Jodhpur, Jodhpur (Raj.).
5. The Executive Engineer, Water Resource Division, Sirohi (Raj.)
----Petitioners
Versus
M/s. Manda Developers And Builders Pvt. Ltd., Shiv Shakti Vihar,
Opposite 220Kv Power House, Jaipur Road, Bikaner Through Its
Power Of Attorney Holder Er. Hardayal Singh S/o Shri Kripa Singh
General Manager (Technical) Of The Company.
----Respondent
D.B. Spl. Appl. Writ No. 943/2019
1. State Of Rajasthan, Through The Secretary, Water Resources
Department, Jaipur.
2. Accountant General (Ag), Rajasthan Government Of India,
Jaipur.
3. The Chief Engineer, Water Resource Department, Rajasthan
Jaipur.
4. The Chief Engineer, Water Resources, North Zone,
Hanumangarh.
5. The Executive Engineer, Water Resources Divsion-I,
Hanumangarh.
----Petitioners
Versus
Bhullar Constructions Pvt. Ltd., A Register Company Situated At
1534, , Sector 18D, Chandigarh (Ut).
----Respondent
D.B. Spl. Appl. Writ No. 986/2019
1. State Of Rajasthan, Through The Chief Secretary, Water
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Resources Department, Jaipur.
2. Chief Auditor General (Cag), Government Of Rajasthan, Jaipur.
3. The Chief Engineer, Rajasthan Water Sector Restructuring
Project (Rswrp), Water Resource Department, Jaipur.
4. The Chief Engineer, Irrigation (North), Water Resources,
Hanumangarh.
5. The Executive Engineer, Gaggar Flood Control And Drainage
Division- Hanumangarh.
----Petitioners
Versus
M/s. Amar Nath Aggarwal Construction Pvt. Ltd., A Private
Limited Company Situated At 3038-A, Guru Kanshi Marg,
Bhatinda (Punjab).
----Respondent
D.B. Spl. Appl. Writ No. 1104/2019
1. State Of Rajasthan, Through The Chief Secretary, Water
Resources Department, Jaipur.
2. Chief Auditor General (Cag), Government Of Rajasthan, Jaipur.
3. The Chief Engineer, Rajasthan Water Sector Restructuring,
Project (Rswrp), Water Resource Department, Jaipur.
4. The Chief Engineer, Irrigation (North), Water Resources
Division, Hanumangarh.
5. The Executive Engineer, Water Resources, Division-Ii,
Hanumangarh.
----Petitioners
Versus
M/s. Subhash Chander And Co., A Partnership Firm Situated At
129 P, Sector 15, Part Ist Gurgaon (Haryana)
----Respondent
D.B. Spl. Appl. Writ No. 1249/2019
1. State Of Rajasthan, Through The Chief Secretary, Water
Resources Department, Jaipur.
2. Chief Auditor General (Cag), Government Of Rajasthan, Jaipur.
3. The Chief Engineer, Rajasthan Water Sector Restructuring
Project (Rswrp), Water Resource Department, Jaipur.
4. The Chief Engineer, Irrigation (North), Water Resources
Division, Hanumangarh.
5. The Executive Engineer, Water Resourced, South Division,
Sriganganagar.
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----Petitioners
Versus
M/s. Gsco Infrastructure Pvt. Ltd., A Private Limited Company
Situated At Sco-67, Sector 20-C, Chandigarh (U.t).
----Respondent
D.B. Spl. Appl. Writ No. 1275/2019
1. State Of Rajasthan, Through The Chief Secretary, Water
Resources Department, Jaipur.
2. Chief Auditor General (Cag), Government Of Rajasthan, Jaipur.
3. The Chief Engineer, Rajasthan Water Sector Restructuring
Project (Rswrp), Water Resource Department, Jaipur.
4. The Chief Engineer, Irrigation (North), Water Resources
Division, Hanumangarh.
5. The Executive Engineer, Water Resources, South Division,
Sriganganagar.
----Petitioner
Versus
M/s. Gsco Infrastructure Pvt. Ltd., A Private Limited Company
Situated At Sco-67, Sector 20-C, Chandigarh (U.t.).
----Respondents
For Petitioner(s) : Mr. Sajjan Singh Rathore, AAG
For Respondent(s) : Mr. Vinay Kothari
Mr. Bhavyadeep Singh
Mr. Ayush Gyoyal
Mr. Gaurav Ranka for
Mr. Muktesh Maheshwari
Mr. Sunil Joshi
HON'BLE MR. JUSTICE VINIT KUMAR MATHUR
HON’BLE MR. JUSTICE ANUROOP SINGHI
Order
REPORTABLE : 08/08/2025
1. The delay in filing the appeals is condoned. Accordingly, the
applications for condonation of delay are allowed.
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2. With the consent of learned counsel for the parties, the
matter is taken up today itself and heard finally at this stage.
3. The present batch of special appeals arise out of common
judgment dated 14.09.2018 passed by learned Single Judge in
batch of writ petitions, therefore, they are being decided by this
common judgment.
4. Briefly noted the facts in the present appeals are that the
respondents herein are registered firms/companies enlisted as
contractors with the Irrigation Department, Government of
Rajasthan. They were awarded various contracts under the
Rajasthan Water Sector Restructuring Project (RWSRP), which
were sponsored by the International Development Association and
funded by the International Bank for Reconstruction and
Development–collectively referred to as “The World Bank”. The
Central Government had issued two notifications–Customs
Notification No. 108/1995 dated 28.08.1995 and Excise
Notification No. 85/1999 dated 06.07.1999–granting exemption
from excise duty for goods falling under the Schedule to the
Central Excise Tariff Act, 1985, when imported into India for
execution of projects financed by the United Nations or any other
international organization. As per the conditions contained in the
bid documents, to avail such exemption, contractors were required
to obtain an excise exemption certificate from the Executive Head
of the Project Implementing Authority, countersigned by the
Principal Secretary or Secretary of the Finance Department of the
concerned State Government, verifying that the goods were
required for execution of the approved project. The respondent
firms submitted declarations and supporting documents in the
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prescribed format, indicating the list of goods such as cement,
diesel, mechanical compactors, trucks, etc., for which the
exemption was sought. Upon due verification, exemption
certificates were issued by the competent authority and duly
countersigned by the Finance Secretary. The respondents availed
excise duty exemption on the basis of these certificates, including
in particular for cement. After the completion of the work by the
respondents, they received letters dated 05.03.2013 and other
similar communications from the concerned Executive Engineer,
informing that the exemption availed on cement was irregular and
proposing recovery of the excise amount. The ground for such
recovery was that cement, being an indigenous good
manufactured by an Indian company, did not qualify as an
“imported” good as contemplated under the relevant notifications.
It was also alleged that the exemption certificate had been
obtained belatedly, contrary to Clause 13.3 of the Instructions to
Bidders (ITB), which required submission of the certificate at the
bid stage. Subsequently, audit objections were raised by the
Comptroller and Auditor General of India (CAG), pointing out
irregularities in the issuance of such exemption certificates to the
respondents. Acting on these objections, the department initiated
recovery proceedings against the respondents for the excise duty
benefit allegedly availed irregularly. The respondents challenged
the said recovery proceedings as well as the audit objections by
filing writ petitions before the learned Single Judge of the High
Court. It is pertinent to note that the CAG, despite being a
necessary party, neither appeared before the Writ Court nor filed
any reply. The learned Single Judge, vide judgment dated
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14.09.2018, allowed the writ petitions and quashed the recovery
orders primarily on the ground that no opportunity of hearing had
been afforded to the respondents before initiating recovery, and
further, that no action had been taken against the government
officials who had issued and countersigned the exemption
certificates. Hence, the present appeals have been filed.
5. Learned counsel for the appellants vehemently submitted
that the Central Government had issued two notifications dated
28.08.1995 and 06.07.1999 exempting excise duty payable on the
goods falling under the Schedule prescribed under the Central
Excise Tariff Act, 1985 particularly to those goods which are
imported into India for execution of projects financed by the
United Nation or an International Organization and, therefore, the
respondents were under an obligation to get the exemption in-
conformity with those notifications only. He further submits that as
per the bid document, the contractor was required to submit the
exemption certificate at the time of submission of the bid
document, however, the same was not submitted on 14.02.2003
and the certificate was filed after a period of five months i.e. on
19.07.2003, therefore, the same was in violation of clause 13.3 of
the Instructions to Bidders (hereinafter referred to as ‘ITB’). Since
the exemption has been obtained by the respondents in
contravention of the conditions of ITB, therefore, the same has
been erroneously granted to them. Learned counsel further
submits that as per the Notification issued by the Union of India,
the benefit of exemption could have been availed only on the
goods which were imported, however, in the present case, the
exemption has been granted on Cement, which is not permissible
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in the Notification issued by the Central Government on the
ground that Cement is not an imported goods as the same has
been manufactured by an Indian Company. Learned counsel
further submits that the recoveries have been effected on account
of wrongly issued exemption certificates, therefore, there is no
illegality. Learned counsel for the appellants has relied upon the
judgment of Hon’ble Supreme Court in case of State of Gujrat
Vs. Arcelor Mittal Nippon Steel India Ltd. (2022) 6 SCC 459,
wherein, it was held that all the terms and conditions contained in
the exemption Notification shall prevail, and the person claiming
the exemption must fulfill and satisfy all the eligibility criteria
mentioned in the exemption Notification. He submits that since
the conditions mentioned in the exemption Notification has not
been fulfilled by the respondents, therefore, the recovery orders
have rightly been issued. Learned counsel has further relied upon
judgment of Hon’ble Supreme Court in the case of Commissioner
of Custom (Import) Mumbai vs. Dilip Kumar and Company,
(2018) 9 SCC 1, wherein, it was held that the interpretation of
the Taxation Statute must be strict, and in case of any ambiguity,
the benefit of such ambiguity must be strictly interpreted in favour
of revenue/state. On the strength of these arguments, he submits
that learned Single Judge has not considered the matter in correct
perspective and has wrongly allowed the writ petition. He,
therefore, prays that the present appeals may be allowed and the
order dated 14.09.2018 may be quashed and set aside.
6. Per contra, learned counsel for the respondents, while
supporting the judgment dated 14.09.2018, submits that the
learned Single Judge has correctly taken into consideration all the
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relevant factors and has rightly come to this conclusion that the
exemption granted to the respondents is perfectly justified and the
same falls in conformity with the Notification dated 108/95-CE,
Dated 28.08.1995. Learned counsel submits that the respondents
were entitled to get exemption of all the goods falling under the
Central Excise and Tariff Act, if the same was supplied to the
United Nations or an International organization for their
official use or supplied to the projects financed by the United
nations or an international organization and approved by the
Government of India. Learned counsel submits that all the three
conditions mentioned in the Notification have been fulfilled as the
work undertaken by the respondents was financed by the
international organization, the goods were falling under the
category of exemption and the same was approved by the
Government of India. Learned counsel further submits that the
exemption, which has been granted to them and utilized by them,
cannot be unilaterally recovered as the benefit of the same has
been utilized by the appellants and has been passed to the other
stakeholders while executing the contract in hand. Learned
counsel for the respondents submits that the recovery notices
have been issued, without giving an opportunity of hearing to the
respondents in utter violations of principles of natural justice. To
buttress his contentions, learned counsel for the respondents has
relied upon the judgments rendered by Hon’ble Supreme Court in
case of Pondicherry State Cooperative Consumer Federation
Ltd. vs. Union Territory of Pondicherry, (2007) 10 VST 630,
Birla Jute & Industries vs. State of M.P. & Anr, (2000) 5
Superme Court Cases 271 and a judgment passed by Division
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Bench of this Court in D.B. Civil Writ Petition No.3234/1998,
(Commissioner, Commercial Taxes, Rajasthan & Anr. vs.
Rajasthan Taxation Tribunal, Jodhpur & Ors)., decided on
12.11.2013. He, therefore, prays that the special appeals
preferred by the appellants may be dismissed.
7. We have considered the submissions made at the Bar and
gone through the relevant record of the case including the
impugned order dated 14.09.2018.
8. At the very outset, we note that the learned Single Judge
has considered the matter threadbare and has rightly come to the
conclusion that as per the CAG Note, the recovery proceedings
have been initiated. It is noted that the exemption certificates
were issued by the competent authorities of the respondents
Department after duly satisfying themselves that the case of the
respondents fall within the four corner of the Notification dated
28.08.1995. It is also noted that the respondents, while
undertaking the work financed by the international organization,
are using the goods falling under the Schedule of the Central
Excise and Tariff Act, 1985 under the category of exempted goods
as the same has been approved by the Government of India.
Therefore, no illegality has been committed by the respondents for
getting the exemption of the same. We also note that the
undisputed facts, narrated above, show that the work executed
by the respondents was financed by an international organization
and that the goods used for the purpose of undertaking the work
was Cement and the same was falling within the category of
exempted goods, and the list of the same was approved by the
Government of India. Thus, in our opinion, the parameters
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mentioned in the Notification dated 28.08.1995 have been fulfilled
by the respondents for availing the exemption on the use of
Cement in the project financed by the international organization
and, therefore, they have rightly been granted the exemption
certificate on the basis of which they have obtained the
exemptions.
9. The argument of learned counsel for the appellants that
there is delay in filing the exemption certificate will not defeat the
purpose for which the same has been issued.
10. It is also noted that before issuing the recovery notices to
the respondents, no opportunity of hearing was granted to them
and on a pointed query raised by the Court to the learned counsel
for the appellants, he fairly admits that before issuing the order of
recovery, no opportunity of hearing was granted.
11. In the considered opinion of this Court, even the recovery
order was issued in gross and utter violation of principle of natural
justice, therefore, the same is also not sustainable. Hence, the
same was liable to be quashed and set aside.
12. We are of the view that the judgments relied upon by the
appellants in case of State of Gujrat Vs. Arcelor Mittal
Nippon Steel India Ltd (supra) is having no applicability in the
present case as the respondents are fulfilling and satisfying all the
eligible conditions for exemption made in the Notification dated
28.08.1995.
13. Further, the judgment replied upon by the appellants in case
of Commissioner of Custom (Import) Mumbai vs. Dilip
Kumar and Company(supra) is also having no application in the
present set of facts discussed hereinabove.
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14. In the considered opinion of this Court, no interference is
warranted in the judgment of the learned Single Bench, whereby,
the writ petitions have been allowed.
15. Accordingly, the special appeals fail and the same are
dismissed.
16. The stay applications and other pending applications, if any,
also stand disposed of.
(ANUROOP SINGHI),J (VINIT KUMAR MATHUR),J
68-SanjayS/-
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