IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA-1803-2002 (O&M) State of Haryana and Others . . . . Appellants Vs. Subhash Chander . . . . Respondents **** Reserved on: 13.05.2026 Pronounced on: 14.05.2026 Pronounced fully/opera6ve part: Fully **** CORAM: HON’BLE MR JUSTICE DEEPAK GUPTA Argued by:- Mr. Gaurav Garg, AAG, Haryana for the appellants. Mr. V.K. Agnihotri, Advocate with Mr. A.K. Agnihotri, Advocate for the respondent. **** DEEPAK GUPTA, J. Defendants are before this Court in the present Regular Second Appeal assailing the concurrent findings recorded by both the Courts below, whereby the suit filed by the plain&ff-respondent seeking decree of permanent injunc&on was decreed by the learned trial Court of learned Civil Judge (Junior Division) vide judgment & decree dated 05.12.2001, and the appeal preferred by the defendants came to be dismissed by the learned first Appellate Court vide judgment & decree dated 14.02.2002. 2. Briefly stated, the plain&ff is a Government contractor, who had been par&cipa&ng in open auc&ons conducted by the Forest Department for purchase and li7ing of standing green and dry trees since the year 1989-90. The plain&ff par&cipated in auc&ons rela&ng to the periods 1989-90, 1990-91 and 1991-92 and a7er acceptance of bids, executed the contracts and deposited the amounts payable under the agreements. NEETIKA TUTEJA 2026.05.14 14:05 I attest to the accuracy and integrity of this document RSA-1803-2002 (O&M) 3. The dispute arose, when the defendants issued no&ce No.278 dated 04.06.1997 demanding a sum of ₹71,799.81 from the plain&ff towards al- leged sales tax liability and further threatened adjustment of the said amount from the security deposits furnished by the plain&ff in respect of other works. Challenging the legality of this no&ce, the plain&ff ins&tuted the present suit pleading that there existed no condi&on in the auc&on terms or agreements making him liable to separately pay sales tax and that the impugned demand was wholly illegal, arbitrary and without jurisdic&on. 4. Upon no&ce, the defendants contested the suit and jus&fied the impugned demand on the plea that an amendment in the Haryana General Sales Tax Act, 1973 necessitated recovery of sales tax from contractors and that instruc&ons in this regard had been received vide communica&on dated 13.03.1997. Prayer was thus made for dismissal of the suit. 5. On the basis of pleadings, necessary issues were framed and par- &es led evidence in support of their respec&ve stands. The learned trial Court, a7er apprecia&ng the oral as well as documentary evidence available on record, held the impugned demand no&ce to be illegal and decreed the suit. The appeal preferred by the defendants also came to be dismissed by the learned first Ap- pellate Court. 6. Assailing the concurrent findings, Learned State counsel has con- tended before this Court that the Courts below have erred in law while holding the impugned demand unsustainable. It is argued that in view of Ar&cle 112 of the Limita&on Act, the State Government is en&tled to recover its dues within a period of thirty years and, therefore, the demand no&ce dated 04.06.1997 could not have been invalidated on the ground of delay. 7. The aforesaid conten&on is devoid of any merit. A perusal of the findings recorded by the learned first Appellate Court reveals that the defen- dants failed to establish existence of any contractual s&pula&on obliga&ng the plain&ff to separately pay sales tax. Rather, Raghbir Singh, Deputy Superinten- NEETIKA TUTEJA 2026.05.14 14:05 I attest to the accuracy and integrity of this document RSA-1803-2002 (O&M) dent appearing as DW-1, categorically admiGed during cross-examina&on that there was no condi&on in the agreement fastening liability upon the contractor to pay sales tax separately. The witness further admiGed that the contracts had already been executed and the security amounts had also been released. 8. Once the rela&onship between the par&es was governed by writ- ten agreements, the rights and liabili&es of the par&es necessarily had to flow from the contractual terms themselves. In absence of any s&pula&on authoris- ing recovery of sales tax from the contractor, the defendants could not unilater- ally impose an addi&onal liability upon the plain&ff a7er execu&on of the con- tracts. It is a seGled principle of law that the terms of a concluded contract can- not subsequently be altered or subs&tuted unilaterally by one of the par&es. The learned first Appellate Court, therefore, rightly observed that the Court can- not create a new contract between the par&es nor can addi&onal obliga&ons be imposed on them. 9. The demand raised by the defendants solely on the basis of subse- quent departmental instruc&ons, despite absence of any contractual covenant, was therefore wholly unsustainable in law. Had there existed any such liability at the incep&on itself, the same would have materially affected the bidding process and financial obliga&ons undertaken by the contractor. 10. As regards reliance upon Ar&cle 112 of the Limita&on Act, the same is en&rely misconceived. Ar&cle 112 merely prescribes the period of limi- ta&on for ins&tu&on of suits by the Central or State Government. The present controversy does not concern maintainability of any recovery suit ins&tuted by the Government. Rather, the issue involved is whether the defendants could legally raise an addi&onal monetary demand dehors the contract a7er conclu- sion of the transac&ons between the par&es. Therefore, Ar&cle 112 has no ap- plica&on to the facts of the present case. 11. The concurrent findings recorded by both the Courts below are based upon proper apprecia&on of evidence and seGled principles governing NEETIKA TUTEJA 2026.05.14 14:05 I attest to the accuracy and integrity of this document RSA-1803-2002 (O&M) contractual obliga&ons. No illegality, perversity or misreading of evidence has been pointed out so as to warrant interference by this Court in exercise of juris- dic&on under Sec&on 100 CPC. 12. No substan&al ques&on of law arises for considera&on. Conse- quently, finding no merit in the present appeal, the same is dismissed. Pending applica&on(s), if any, shall also stand disposed of. (DEEPAK GUPTA) JUDGE 14.05.2026 Neeka Tuteja Whether speaking/reasoned? Yes Whether reportable? 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