In Brief
In this appeal, the State of Orissa challenged its obligation to reimburse sales tax, duties, and royalties to contractors on a public works contract. The Supreme Court held that where existing contracts explicitly provide for such reimbursement, the State is contractually bound to pay them. The Court disapproved subsequent government circulars that attempted to deny reimbursement, finding them to be perverse constructions and unwarranted attempts to evade contractual obligations. The appeal was dismissed, confirming the State's duty to honour the original contract terms.
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