#Public Works Contracts

Allahabad HC rules that contractual tax liability under public works contracts is arbitrable under Section 37 of the Arbitration and Conciliation Act, 1996. The court distinguishes contractual tax obligations from statutory tax assessments, affirming that arbitral awards on such disputes are final and not subject to statutory reassessment. This impacts contractors and government departments navigating GST-related contractual disputes.

The Andhra Pradesh High Court directed state authorities to release Rs. 30,16,338 to a contractor within eight weeks for MGNREGS works, emphasizing the state's obligation to honor contractual commitments and prevent arbitrary withholding of payments. The ruling underscores the enforceability of writ jurisdiction under Article 226 against state inaction in public contracts.

The Kerala High Court has ruled that public works contractors may invoke legitimate expectation to demand reconsideration of contract prices after sudden commodity surges, if the government previously granted similar relief under comparable circumstances. This sets a binding precedent for state agencies to honor consistent administrative practices, protecting contractors from unilateral burden-shifting during unforeseen market disruptions.