When there is an arbitration clause in writing, where both parties have signed, without invoking Arbitration Clause, the parties cannot be permitted to come before the High Court, especially by invoking Article 226 of the Constitution. Accordingly the present writ petition cannot be entertained by this Court at this moment.
Post GST Liability –– The petitioner sought direction to the first respondent to refund the GST Component of Rs. 43,73,269/- along with interest at the rate of 18% per annum and to further direct the first respondent to pay the GST on lease rent along with lease rent. The first respondent is engaged in business of generation of power and accordingly proposed to set up a 50MW solar power project in Tamilnadu. For the said purpose, the petitioner had, entered into a lease agreement with the first respondent on 26.05.2017. The petitioner counsel submitted that there shall be no GST on lands and buildings and the said issue, had already been pending before the Hon'ble Supreme Court of India. Further, if at all any taxes, rates or cess and other levy including the penalties to be imposed, that shall be restricted only to Corporation/Municipal/Panchayat tax or Urban Land tax etc., of the State or Central Government or local authorities, as has been pointed out in Clause 14 of the agreement. Therefore, if the GST is introduced subsequent to the agreement, as occurred in Clause 14 of the agreement, the GST component, which is a post agreement tax component cannot be expected to be paid by the petitioner. The respondent counsel submitted that it is a settled legal proposition that where a lis arises out of terms of contract between the parties, where the provision of invoking arbitration clause under Arbitration and Conciliation Act, 1996 is available in writing, where both parties have signed, without invoking the arbitration clause, neither party can be permitted to invoke the extraordinary jurisdiction of this Court under Article 226 of the Constitution. The court observed that a clear lis has arisen between the petitioner and the first respondent under Clause 14 of the agreement. Therefore, this is a fit case, where, both parties can be relegated to approach the arbitrator to be constituted/nominated in this regard, in the manner provided under Clause 21 of the agreement.
Held that:- The Hon’ble High Court rejected the writ petition.
When there is an arbitration clause in writing, where both parties have signed, without invoking Arbitration Clause, the parties cannot be permitted to come before the High Court, especially by invoking Article 226 of the Constitution. Accordingly the present writ petition cannot be entertained by this Court at this moment.
Post GST Liability –– The petitioner sought direction to the first respondent to refund the GST Component of Rs. 43,73,269/- along with interest at the rate of 18% per annum and to further direct the first respondent to pay the GST on lease rent along with lease rent. The first respondent is engaged in business of generation of power and accordingly proposed to set up a 50MW solar power project in Tamilnadu. For the said purpose, the petitioner had, entered into a lease agreement with the first respondent on 26.05.2017. The petitioner counsel submitted that there shall be no GST on lands and buildings and the said issue, had already been pending before the Hon'ble Supreme Court of India. Further, if at all any taxes, rates or cess and other levy including the penalties to be imposed, that shall be restricted only to Corporation/Municipal/Panchayat tax or Urban Land tax etc., of the State or Central Government or local authorities, as has been pointed out in Clause 14 of the agreement. Therefore, if the GST is introduced subsequent to the agreement, as occurred in Clause 14 of the agreement, the GST component, which is a post agreement tax component cannot be expected to be paid by the petitioner. The respondent counsel submitted that it is a settled legal proposition that where a lis arises out of terms of contract between the parties, where the provision of invoking arbitration clause under Arbitration and Conciliation Act, 1996 is available in writing, where both parties have signed, without invoking the arbitration clause, neither party can be permitted to invoke the extraordinary jurisdiction of this Court under Article 226 of the Constitution. The court observed that a clear lis has arisen between the petitioner and the first respondent under Clause 14 of the agreement. Therefore, this is a fit case, where, both parties can be relegated to approach the arbitrator to be constituted/nominated in this regard, in the manner provided under Clause 21 of the agreement.
Held that:- The Hon’ble High Court rejected the writ petition.