Arbitration referral and limited GST compliance can proceed together without prejudice to the partners' substantive rights.

An inter se partnership dispute already referred to arbitration can be supported by ancillary directions to constitute the arbitral forum, including appointment of a sole arbitrator when the parties cannot agree. For interim statutory compliance, one partner may be permitted to file GST returns and carry out related acts where registration particulars and prior filings stand in his name, provided the arrangement is expressly limited to compliance and does not affect rival claims. The substantive rights of the parties remain open for determination in the appropriate forum, and the petition is disposed of on that basis.

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Issues: (i) Whether the dispute between the partners was required to be referred for arbitration and the sole arbitrator appointed. (ii) Whether, for the limited purpose of filing GST returns and related compliance, one of the partners could be permitted to act on behalf of the firm without affecting the rival claims of the parties.

Issue (i): Whether the dispute between the partners was required to be referred for arbitration and the sole arbitrator appointed.

Analysis: The dispute inter se the partners had already been referred to arbitration by a prior order passed on an application under Sections 7 and 8 of the Arbitration and Conciliation Act, 1996, and that order had attained finality. Since the parties were unable to agree on the arbitrator, a further direction was warranted to give effect to the earlier reference and ensure constitution of the arbitral forum.

Conclusion: The dispute was referred to arbitration, and a retired District Judge was appointed as the sole arbitrator to conduct the proceedings at the Arbitration and Conciliation Centre.

Issue (ii): Whether, for the limited purpose of filing GST returns and related compliance, one of the partners could be permitted to act on behalf of the firm without affecting the rival claims of the parties.

Analysis: The GST returns had been filed earlier by one partner and the GST registration particulars stood in his name. To avoid interruption in compliance, the Court permitted him to file GST returns and perform connected acts, while making it clear that the arrangement was only for that limited purpose and would not create any right or interest in his favour. The rival contentions were expressly left open for decision in the appropriate forum.

Conclusion: The partner was permitted to file GST returns and undertake related compliance acts for the firm, without prejudice to the parties' rights.

Final Conclusion: The petition was disposed of by preserving the arbitration process and by making a limited compliance arrangement for GST filings, without adjudicating the substantive rival claims.

Ratio Decidendi: Where an inter se partnership dispute has already been validly referred to arbitration, the Court may issue ancillary directions to preserve statutory compliance in the interim, without affecting the parties' substantive rights.

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