Special audit fee disputes fall under the Income-tax Act, not the MSMED Act, so MSEFC jurisdiction cannot displace the tax scheme.

A writ petition challenging a reference to arbitration may be examined at the threshold where the objection is one of complete lack of jurisdiction. The Delhi High Court noted that fees for special audits under Section 142(2A) of the Income-tax Act are fixed within a statutory tax framework, not in a buyer-supplier commercial setting. Because such remuneration is governed by the specific scheme under the Income-tax Act, the MSMED Act does not apply and Section 24 cannot displace that mechanism. The MSEFC therefore had no jurisdiction to refer the fee disputes to arbitration, and any challenge to the fee determination must lie within the tax law framework.

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Issues: (i) Whether a writ petition challenging the reference made by the MSEFC to arbitration was maintainable at the threshold on the ground of complete lack of jurisdiction. (ii) Whether the MSMED Act applied to fee disputes arising from special audits directed under Section 142(2A) of the Income-tax Act, 1961, so as to confer jurisdiction on the MSEFC despite the determination of remuneration under Section 142(2D) of that Act.

Issue (i): Whether a writ petition challenging the reference made by the MSEFC to arbitration was maintainable at the threshold on the ground of complete lack of jurisdiction.

Analysis: The writ jurisdiction could be invoked in exceptional cases where the tribunal or authority acted without inherent jurisdiction. A challenge to jurisdiction was therefore capable of being examined at the threshold, particularly where the dispute would otherwise be driven into a statutory arbitration process under a regime that might itself be inapplicable. The Court found that the jurisdictional objection was not a mere dispute on facts or merits but went to the root of the MSEFC's competence.

Conclusion: The writ petitions were maintainable for examination of the jurisdictional objection.

Issue (ii): Whether the MSMED Act applied to fee disputes arising from special audits directed under Section 142(2A) of the Income-tax Act, 1961, so as to confer jurisdiction on the MSEFC despite the determination of remuneration under Section 142(2D) of that Act.

Analysis: Chapter V of the MSMED Act is concerned with delayed payments between a buyer and a supplier in a commercial setting. By contrast, a special audit under Section 142(2A) is a statutory exercise undertaken to assist the Assessing Officer in assessment proceedings, and remuneration under Section 142(2D) is fixed by the Income-tax authorities according to the statutory scheme and prescribed guidelines. The relationship is not one of buyer and supplier, the remuneration is not commercial consideration, and the MSEFC lacks the domain expertise and statutory basis to reopen the fee determined under the Income-tax Act. Section 24 of the MSMED Act could not override the specific scheme governing special audit remuneration, and the Income-tax Act prevailed in this context.

Conclusion: The MSMED Act did not apply, and the MSEFC lacked jurisdiction to refer the fee disputes to arbitration.

Final Conclusion: The impugned references to the MSEFC and the consequential arbitration proceedings were unsustainable, and the special-audit fee disputes remained governed by the Income-tax Act, with the assessee-side remedy, if any, confined to challenge under the tax law framework.

Ratio Decidendi: A statutory fee fixed for a special audit under the Income-tax Act does not create a buyer-supplier commercial dispute under the MSMED Act, and the latter cannot be invoked to displace the specific statutory mechanism governing remuneration for such audits.

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