Mortgage, Enforcement And Related Declaratory Reliefs Are Non-Arbitrable: Bombay High Court

The Bombay High Court Bench of Justice Sandeep V Marne has observed that enforcement of mortgage is a right in rem and any dispute seeking enforcement of mortgage cannot be referred to arbitration. Civil suit will lie for enforcement of such a right in rem. Facts Defendant No.1 and his partners are developers appointed for redevelopment of Defendant No.5 – Society under Development Agreement dated February, 2014 and Supplemental Development Agreement dated March 16, 2021. The...

Income Tax Act | Deputy Commissioner Cannot Act Beyond DRP Directions; Assessment After S.144C(13) Time Limit Invalid: Bombay High Court

The Bombay High Court stated that the Deputy Commissioner cannot act beyond the dispute resolution panel (DRP) directions; assessment completed beyond Section 144C(13) of the Income Tax Act, 1961, the time limit is invalid. Section 144C(13) of the Income Tax Act, 1961 mandates the completion of the assessment within one month from the end of the month in which DRP directions are received. Justices B.P. Colabawalla and Amit S. Jamsandekar stated that the Deputy Commissioner cannot...

Input Tax Credit Can't Be Blocked If Credit Balance Is Nil: Bombay High Court

The Bombay High Court on Tuesday held that Input Tax Credit (ITC) cannot be blocked under Rule 86-A of the Central Goods and Services Tax Rules, 2017, if the electronic credit ledger of a taxpayer shows a nil balance on the date of the blocking order. A Division Bench of Justice M S Sonak and Justice Advait M Sethna observed, “Therefore, on a plain reading of the rule, if on the date of issuing the impugned order or on the date of making an order under Rule 86-A blocking the ITC in...

Prior IBC Proceedings Don't Bar Criminal Prosecution Of Directors Under S. 138 Negotiable Instruments Act: Bombay High Court

The High Court of Bombay, Nagpur Bench, comprising Justice M.M. Nerlikar, has held that the prior initiation of IBC proceedings does not bar criminal prosecution of directors under section 138 of the Negotiable Instruments Act. Background of the Case The petitioner extended a short-term loan of Rs. 15 lakhs to the respondent through its directors. A post-dated cheque was issued as a security by the director. The NCLT admitted the respondent company into the CIRP, and its failure ...

Pre-Show Cause Notice Consultation Not An Empty Formality, Mandatory When Demand Is Over ₹50 Lakhs: Bombay High Court

The Bombay High Court has held that pre-show cause notice consultation is not an empty formality; mandatory before the show cause notice (SCN) in demands above Rs. 50 lakhs. The question before Justices M.S. Sonak and Advait M. Sethna was whether a pre-consultation notice would be mandatory before issuing show cause notices where the tax demand exceeds Rs. 50 Lakhs. The bench opined that ….The requirement of a pre-consultative process cannot be dismissed as some empty formality....

Proceedings For Conciliation & Arbitration Under MSME Act Cannot Be Clubbed: Bombay High Court

The Bombay High Court has set set aside two ex-parte orders passed by the Micro and Small Enterprises Facilitation Council (MSEFC), Daman holding that the council acted in breach of mandatory two stage procedures under the Micro, Small and Medium Enterprises Development Act, 2006 (“MSMED Act”). The court remitted the matter for fresh arbitration in accordance with law. A bench led by Justice N.J. Jamadar held that “If the appellant had not submitted its reply at the conciliation...

Mere Registration Of FIR Or Pendency Of Proceedings Before DRT Does Not Bar Reference To Arbitration: Bombay High Court

The Bombay High Court bench of Justice Advait M. Sethna has held that the disputes between Mangal Credit and Fincorp Limited and Ulka Chandrshekhar Nair are arbitrable under the Arbitration and Conciliation Act, 1996 (Arbitration Act) even though allegations of fraud and forgery were raised and a criminal was filed in which no progress has been made. The Court further held that “Merely because the Respondent has chosen to attack the Mortgage Deeds which contain the arbitration clause...

Denial Of Re-Testing Of Seized Goods Must Be Occasional And Recorded In Writing: Bombay High Court

The Bombay High Court has held that re-testing of seized goods is a trade facilitation measure, not to be denied in the ordinary course. Justices M.S. Sonak and Advait M. Sethna stated that "...Ultimately, such denial must be only occasional and that too, on reasonable grounds to be recorded in writing. The guidelines emphasised that this facility of re-testing is nothing but a trade facilitation measure, which, generally, will not be denied in the ordinary course…" The ...

Individual Flat Owners Forming Cooperative Society Are Bound By Arbitration Clause Contained In Sale Agreement: Bombay High Court

The Bombay High Court bench of Justice N.J. Jamadar has observed that when individual flat owners form a cooperative society to enforce rights created in favour of the individual members under the Agreements for Sale, the society cannot claim that it is not bound by the arbitration clause contained in those Agreements. The argument that it is not a signatory to the Agreements for Sale is untenable and such society is not a third party to the arbitral proceedings. Facts Respondent ...

Pending Proceedings Under Omitted CGST Rules 89(4B) & 96(10) Lapse In Absence Of Savings Clause: Bombay High Court

The Bombay High Court has held that all pending proceedings under the omitted CGST Rules 89(4B) & 96(10) lapse in the absence of a savings clause. The bench agreed with the assessee/petitioners that the provisions of Section 6 of the General Clauses Act are not attracted and therefore the pending proceedings can claim no immunity or protection. Unless the Respondents can establish that Section 6 of the General Clauses Act, 1897, applies or that there was any savings clause in...

Income Tax Act | Payment To Consulting Doctors Appointed On Probation Is Not Salary; TDS Deductible U/S 194J, Not U/S 192: Bombay High Court

The Bombay High Court has held that payments to consultant doctors are not salary. Hence, TDS is deductible under section 194J and not under section 192 of the Income Tax Act. Justices B.P. Colabawalla and Firdosh P. Pooniwalla stated that there does not exist an employer-employee relationship between the assessee and consultant doctors, and the payments made to them by the assessee come under the purview of section 194J of the Income Tax Act. Section 194J of the Income Tax Act,...

Income Tax Act | Draft Assessment Order Not Permissible U/S 144C(1) When TPO Makes No Variation: Bombay High Court

The Bombay High Court has held that a draft assessment order is not permissible under section 144C(1) of the Income Tax Act when the TPO (transfer pricing officer) makes no variation. Section 144C(1) of the Income Tax Act, 1961, provides that the Assessing Officer should forward a draft of the proposed assessment order to the eligible assessee if any variation of the income or loss returned is proposed to be made which affects the assessee negatively. Justices B.P. Colabawalla and...