### Department Must Disburse Admitted Contractual Dues and Statutory Refunds Despite Ongoing Administrative Delay

The petitioner executed contractual works for the operation and maintenance of fire safety and CCTV systems at Government Medical College & Hospital, Shahdol between 2020 and 2022.

The petitioner approached the High Court seeking a writ of mandamus for the release of outstanding dues, refund of "illegally deducted" EPF/ESIC contributions (as the petitioner employed fewer than 20 workers and was statutorily exempt), and the application of a revised GST rate of 18% as per Government notifications.

Internal departmental communications dated 23.07.2024 and 11.09.2024 expressly acknowledged the petitioner’s entitlement to these amounts.

Despite budgetary allotments being sanctioned on 18.01.2024, the respondents failed to disburse the payments.

1. Whether the respondent authorities are liable to release admitted contractual dues and refund EPF/ESIC deductions acknowledging the petitioner’s statutory exemption.

2. Whether the petitioner is entitled to the revised GST rate of 18% on pending bills pursuant to GST Notification No. 11/2017 and subsequent PWD orders.

3. Whether interest is payable on the delayed disbursement of admitted dues.

The Court relied on the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, noting that the mandatory deduction of EPF applies only when 20 or more workers are employed.

Regarding tax, the Court referenced GST Notification No. 11/2017 (dated 13.07.2022) and the Public Works Department order (dated 31.10.2022), which revised the GST rate for works contracts from 12% to 18%.

On the issue of interest for delayed payments, the Court applied the principle established by the Hon’ble Supreme Court in Union of India vs. Willowood Chemicals (P) Ltd. (2022) 9 SCC 341, which justifies the award of interest on withheld entitlements.

The Court observed that the respondents’ own internal documents (Annexures P/22 and P/30) admitted the petitioner’s claims.

Specifically, the authorities acknowledged that since only eight workers were engaged, EPF/ESIC deductions were not legally required under the 1952 Act.

Furthermore, the departments had already issued internal directions to process bills at the 18% GST rate and had received the necessary budgetary sanctions.

Since the liability was "admitted" by the State through its internal correspondence and notifications, the Court found no justification for the continued withholding of funds.

The Court linked these factual admissions to the legal obligation of the State to act fairly and expeditiously once a debt is acknowledged.

The Court held that the authority must take specific note of the admitted positions in Annexures P/22, P/24, and P/30.

If found entitled, the petitioner must be paid the outstanding amounts along with interest @ 6% per annum from the date of entitlement until actual payment, following the Willowood Chemicals precedent.

The petition was disposed of without costs.