Bombay High Court Sets Aside ITC Block On Suspicion Of Ineligible Credit, Says It Ceases After One Year

The Bombay High Court has recently set aside the blocking of Input Tax Credit (ITC) of NZS Traders Pvt. Ltd., holding that such a restriction made on apprehension of fraud cannot continue beyond one year and ceases to operate by law. A Bench of Justice G. S. Kulkarni and Justice Aarti Sathe explained that Rule 86A empowers GST authorities to block a taxpayer from using the credit available in its electronic credit ledger if they have reasons to believe that the credit has been wrongly or...

Bombay High Court Sets Aside GST Order Passed Before Scheduled Date Of Hearing

The Bombay High Court has set aside a GST adjudication order passed even before the scheduled date of hearing, holding that it was vitiated by a breach of natural justice. A bench of Justices G S Kulkarni and Aarti Sathe held that the order was passed before the scheduled hearing date fixed in the show cause notice. “The impugned order, however, was passed on 30 March 2022 in regard to which, admittedly, no hearing was granted to the petitioner as also no opportunity to file reply to the said...

Bombay High Court Sets Aside Awards Against Stock Broker For Ignoring Claimant's Statements

The Bombay High Court recently set aside concurrent arbitral awards, holding that ignoring vital evidence, including the claimant's own statements, rendered the findings perverse.Justice Somasekhar Sundaresan heard a petition by Kantilal Chhaganlal Securities Pvt Ltd. The firm had challenged an arbitral award dated October 23, 2013 and an appellate award dated April 8, 2014 in favour of its client. Setting aside the awards, the court said: “That vital evidence that cuts to the root of the...

Service Of Notice On One Partner Deemed Service On All Under Presidency Towns Insolvency Act: Bombay HC

The Bombay High Court has held that service of an insolvency notice on a firm or any one of its partners amounts to valid service on all partners under the Presidency Towns Insolvency Act, 1909. The court rejected the argument that limitation should be counted from the last date of service on each partner. A single-judge bench of Justice Jitendra Jain was hearing an insolvency petition where the judgment debtors challenged its maintainability under Section 12(1)(c) of the Presidency Towns...

Refusal To Produce Audited Financials Justifies Adverse Inference: Bombay High Court Upholds Arbitral Award

The Bombay High Court has recently refused to interfere with an arbitral award, holding that refusal by a party to produce audited financial statements justifies the drawing of an adverse inference by the arbitral tribunal. The court remarked that a party cannot selectively rely on tax returns while withholding audited financial statements and books of account. A bench of Justice Somasekhar Sundaresan observed: “As such, every business enterprise would have both sets of financial information...

Bombay HC Quashes Rs. 1.26 Crore Service Tax Demand For Failure To Comply With Pre-SCN Process

The Bombay High Court on 12 March, quashed a service tax show cause notice, holding that failure to conduct mandatory pre-show cause notice (pre-SCN) consultation, as required under CBEC circulars, vitiates the entire proceedings. A Bench of Justices G. S. Kulkarni and Aarti Sathe held that pre-SCN consultation, mandated by circulars issued under Section 37B of the Central Excise Act, is a binding requirement and cannot be bypassed merely because summons were issued to the taxpayer. The Bench...

Telangana High Court Disposes Plea After State Assures Missing GST Documents Won't Be Relied Upon in Adjudication

The Telangana High Court has disposed of a writ petition filed by Bengal Cold Rollers Pvt. Ltd., recording the State's statement that seized documents whose originals are missing will not be relied upon in adjudication, while permitting proceedings to continue on the basis of available material. A Bench of Chief Justice Apresh Kumar Singh and Justice G.M. Mohiuddin observed that once the State clarified that such missing documents would not be relied upon, the grievance of the petitioner stood...

Bombay High Court Stays Retrospective GST Demand On Insurance To SEZ Units Allegedly For Employee Benefits

The Bombay High Court has stayed GST demands on insurers over policies issued to SEZ units, which the department claimed were for employees, prima facie finding the retrospective levy may be without jurisdiction prior to October 1, 2023.A Bench of Justice G. S. Kulkarni and Justice Farhan P. Dubash held, "Prima-facie, we find much substance in the contention urged on behalf of the petitioners that the designated officer would not have jurisdiction to retrospectively levy tax on the petitioners...

Bombay High Court Upholds Foreign Award In TASL–Ion Exchange Dispute, Rejects Public Policy Challenge

The Bombay High Court on 17 March held that the “public policy of India” ground under Section 48 of the Arbitration Act, 1996 (the Act), cannot be used to apply Indian legal principles to challenge enforcement of a foreign arbitral award arising from a foreign-law governed contract. Justice Somasekhar Sundaresan allowed a petition filed by Trading and Agency Services Limited (TASL), a Qatari company, to enforce a foreign arbitral award of USD 978,300 against Ion Exchange (India) Limited. The...

Disputes During Subsisting Works Contract Can Be Referred To Arbitration Within 3 Years: Madhya Pradesh HC

The Madhya Pradesh High Court at Jabalpur has recently held that contractors can approach the arbitration tribunal within three years if a dispute arises while a government works contract is still ongoing, even though the law also prescribes a one-year limitation after the final authority's decision. A Division Bench of Justice Vivek Rusia and Justice Pradeep Mittal set aside an order of the M.P. Arbitration Tribunal, which had dismissed a plea filed by LCC Projects Pvt. Ltd. against Madhya...

'No Second Bite At The Cherry': Bombay High Court Refuses Plea For Fresh Arbitrator By Negligent Party

The Bombay High Court has observed that while the expiry of an arbitrator's mandate under Section 29A of the Arbitration and Conciliation Act, 1996 does not automatically terminate arbitral proceedings, a defaulting party cannot be allowed “another bite at the cherry” by seeking appointment of a fresh arbitrator after a court has already refused to extend the mandate due to that party's own negligence. A single-judge bench of Justice Sandeep V. Marne, while dismissing an application filed by...

Bombay High Court Refuses to Interfere With Enhanced Compensation In NH-6 Land Acquisition Arbitration Case

The Bombay High Court has refused to interfere with enhanced compensation awarded to landowners for acquisition of land for widening National Highway-6 from Jalgaon to the Gujarat boundary, holding that no case was made out for interference under the limited scope of appellate review. Dismissing a batch of arbitration appeals filed by the National Highways Authority of India (NHAI), a single-judge bench of Justice Arun R. Pedneker upheld the arbitral awards as well as the orders passed under...