High Court affirms arbitration clause for Service Tax disputes, dismisses appeals. Writ petitions not suitable.

The High Court dismissed the appeals, affirming that the appellant's remedy lies in invoking the arbitration clause for resolving disputes related to Service Tax liabilities. The court found no error in the impugned order and emphasized that the writ petitions were not the proper forum for such disputes. The parties were left to bear their own expenses.

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Issues Involved:
1. Return of Fixed Deposit Receipts (FDRs) retained by authorities against Service Tax liabilities.
2. Applicability and adjudication of Service Tax on garbage disposal charges.
3. Invocation of arbitration clause for resolving disputes.

Issue-wise Detailed Analysis:

1. Return of Fixed Deposit Receipts (FDRs) retained by authorities against Service Tax liabilities:
The appellant sought a writ of mandamus for the return of FDRs retained by the Airports Authority of India (AAI) and Delhi International Airport Limited (DIAL) against potential Service Tax liabilities. The High Court dismissed this plea, directing the appellant to resolve the dispute through arbitration as per the contract's arbitration clause. The court noted that the security deposits were withheld pending adjudication by the Service Tax Department, and the appellant had remedies available through arbitration.

2. Applicability and adjudication of Service Tax on garbage disposal charges:
The appellant had agreements with AAI and DIAL for garbage disposal services, and a dispute arose regarding the applicability of Service Tax on these services. The Service Tax Department issued show cause notices to the respondents. The High Court previously allowed the appellant to participate in appeal proceedings before the Central Excise and Service Tax Appellate Tribunal (CESTAT). The CESTAT upheld the Service Tax on several revenue streams but remanded the quantification issue to the Commissioner. The High Court noted that the appellant did not participate in these proceedings and instead filed another writ petition, which was rightly dismissed.

3. Invocation of arbitration clause for resolving disputes:
The High Court emphasized that the arbitration clause in the License Agreement should be invoked to resolve disputes regarding Service Tax liabilities. The court reiterated that writ proceedings were not appropriate for deciding the Service Tax applicability on garbage collection charges, especially when the Service Tax Authorities were not impleaded. The court upheld the view that the appellant should seek resolution through arbitration, as previously directed in the earlier round of litigation.

Conclusion:
The High Court dismissed the appeals, affirming that the appellant's remedy lies in invoking the arbitration clause for resolving disputes related to Service Tax liabilities. The court found no error in the impugned order and emphasized that the writ petitions were not the proper forum for such disputes. The parties were left to bear their own expenses.

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