The Superintending Engineer v. M/S Gropu Engineers Corporation

IN THE HIGH COURT AT CALCUTTA

[ CIRCUIT BENCH AT PORT BLAIR ] *** FMAT(ARBAWARD)/1/2024 The Superintending Engineer Vs.

M/S. Group Engineers Corporation Mr. Rakesh Kumar ... for the appellant Mr. Tapan Kumar Das ... for the respondent March 18, 2025 [SR] Item No.8 1.

This appeal is arising out of an order passed by the learned District Judge on 12th October, 2023 in an application under section 34 of the Arbitration and Conciliation Act, 1996. In view of the nature of the award, the only issue survives for consideration is whether the respondent award holder is entitled to payment of GST applicable as per the Goods and Services Tax Act, 2017. We are not required to go into other issues as claims that have been rejected by the learned Arbitrator are not under challenge.

2.

It is an admitted position that under the works contract, the award holder was required to supply different kind of transformers. The department issued the work order on 11th May, 2017. Under the contract, the contractor/claimant was required to supply different kinds of transformers within the time period of 90 and 120 days as the case may be. 3.

The claimant supplied 25KVA, 15 KVA, 63 KVA, 100KVA distribution transformers within 90 days within 10.08.2017 and to supply 200 KVA distribution transformers within 120 days

i.e. 11.09.2017. The Goods and Service Tax Act was introduced by the Government on 01.07.2017. The question arises whether in view of the clause 1 of the contract under which the price quoted shall be firm and final inclusive of all taxes and duties excluding local Octoroi charges and any changes in tax structure within the valid period shall be paid in actual would disentitle the appellant to claim for payment of GST as applicable to such goods by virtue of coming into force of GST on 01.07.2017.

4.

It is strenuously argued on behalf of the appellant that in view of clause-1 its specifically mentioned that would disentitled the claimant to payment of GST.

5.

This was answered by the learned Arbitrator in favour of the claimant as the time of supply of goods shall be considered to be the date of issue of invoice by the supplier and for the purpose of tax liability the date of issue of invoice would be relevant date.

6.

The learned arbitrator was of the view that the some of the goods were supplied within the period of 90 days and 120 days in terms of the work order dated 11.05.2017 and few others within the extended period and hence the said clause has to be read by taking into consideration the dates when the said transformers were actually supplied under the contract. 7.

If the supplies were to be made within 90 days and 120 days, then the cutoff date for distribution of transformers would be 11.08.2017 and 11.09.2017 within which time the GST Act had come into force as per gazette notification published i.e. on or from 01.07.2017.

8.

Accordingly, any change in tax structure during the valid period of supply order to be considered from the date of the work order as argued is not acceptable and the learned arbitrator, in our view, has rightly not accepted the said argument.

9.

Learned District Judge has also taken note of the aforesaid fact and has found no reason to interfere with the award passed by the learned Arbitrator.

10.

It is not in dispute that the liability to pay tax on services shall arise amongst others on the date of issue of invoice by the supplier. The invoice was part of the record and it appears from the invoice that 18% interest has been paid by the supplier on the goods supplied.

11.

Section 12 of the Goods and Services Tax Act, 2017clearly stipulates that the liability to pay tax on goods shall arise at the time of supply, as determined in accordance with the provisions of this section. The time of supply of goods shall be the earlier of the following dates, namely:- (a) The date of issue of invoice by the supplier or the last date on which he is required under section 31, to issue the invoice with respect to the supply; or (b) The date on which the supplier receives the payment with respect to the supply.

12.

Section 13 contains similar provision as regards the liability to pay tax on services in view of the fact that the goods were supplied during the validity period and the extended period beyond 01.07.2017 when GST has come into force. The finding of the learned Arbitrator on such admitted fact does not call for any interference.

13.

The award can be challenged on the grounds mentioned in section 34 of the Arbitration and Conciliation Act. The grounds on which the award was challenged does not fall within any of the conditions stipulated under section 34 of the Arbitration and Conciliation Act, 1996.

14.

The interpretation of contact by the arbitrator is within the jurisdiction of the Arbitrator. The Arbitrator has considered all relevant materials including the contract and was of the view that by reason of the fact that by time the transformers are required to be supplied, the GST has come into the operation and hence clause 1 would not be a bar, is an interpretation of contract and applicable provision of law which does not call for any interference in the limited jurisdiction exercised by the Court under section 34 of the Arbitration and Conciliation Act, 1996 or limited jurisdiction exercised by the Appellate Forum under section 37 of the Arbitration and Conciliation Act, 1996. 15.

On such consideration, we do not find any reason to interfere with the order passed by the learned District Judge. 16.

The appeal fails. There shall be no order as to costs. ( Soumen Sen, J. ) (Raja Basu Chowdhury, J. )