17 Sep 2022 5:06 AM GMT
The Supreme Court has held that disputes related to tax concessions are not arbitrable. The division bench of Justice Dhananjaya Y Chandrachud and Justice Hima Kohli has observed that the High Court was in error in holding that the terms of e-auction provided that any dispute was arbitrable. Undoubtedly, a contractual dispute would be amenable to being resolved by...
The Supreme Court has held that disputes related to tax concessions are not arbitrable.
The division bench of Justice Dhananjaya Y Chandrachud and Justice Hima Kohli has observed that the High Court was in error in holding that the terms of e-auction provided that any dispute was arbitrable. Undoubtedly, a contractual dispute would be amenable to being resolved by arbitration. However, in the present case, the relief related to tax concessions was not of an arbitrable nature.
The appellant is a private limited company with a head office in Kolkata and branches in other states, including Uttar Pradesh. The Uttar Pradesh branch is located in the district of Bulandshahar and was established on July 18, 2001. The appellant is involved in the trading of coal, which it obtains from e-auctions conducted by the subsidiaries of Coal India Limited.
The appellant has stated that after purchasing coal from the respondent, Northern Coal Fields Limited, through e-auction, the appellant took certain consignments through the railways, where the destination was the State of Madhya Pradesh. Initially, the respondent charged a concessional rate of tax at two percent.
The grievance of the appellant was that the respondent did not issue Form E-1 and did not grant the benefit of Form C while charging tax at the rate of four percent.
The appellant moved a writ petition before the High Court seeking directions for the respondent to accept Form C and issue Form E-1 to the petitioner for the goods distained from one state to another. The appellant has also sought a direction that the respondent grant the benefit of the concessional rate of tax to the petitioner after accepting Form C on record.
The High Court held that the terms of e-auction provided that any dispute be arbitrable. The appellant was virtually seeking the enforcement of a contract through a writ petition to raise a claim for refund.
While allowing the appeal, the Supreme Court overturned the High Court's judgement and order and remanded the case back to the High Court for further consideration on the merits.
"We clarify that we have not expressed any opinion on the merits of the respective rights and contentions of the parties in the writ petition. Since the writ petition was filed in 2016, we request the High Court to endeavour an expeditious disposal preferably within a period of four months from the date of receipt of a certified copy of this order. The respondents shall file their reply within four weeks," the court said.
Case Title: M/s Shree Enterprise Coal Sales Pvt Ltd. Versus Union Of India
Citation: 2022 LiveLaw (SC) 774
Counsel For Petitioner: Advocates Rohit Amit Sthalekar, Anish Choudhury, Anand Kamal, Akash Agarwal
Counsel For Respondent: ASG Vikramjit Banerjee
Arbitration and Conciliation Act 1996 - Relief reated to tax concessions are not arbitrable
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