TaxTMI 
TaxTMI 
2024 (1) TMI 928
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.... Civil Procedure, 1908 ("CPC") and seeks return of the petition on ground of lack of pecuniary jurisdiction of this Court entertain this Petition. On 13th February, 2023, this Court had referred the matter to the Joint Registrar ("JR") for computation of Specified Value. Accordingly, vide order dated 19th July, 2023 ("JR Order"), the JR has ascertained the Specified Value to be INR 1,79,08,623.63. The Petitioner contests this valuation, asserting that the determination is erroneous as it fails to consider several crucial components, which, if accounted for, could significantly impact the calculated Specified Value. In light of these conflicting positions, this Order will address and decide upon the issue of the Specified Value and the Court....
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.... Petitioner from the date of notice invoking arbitration. The argument put forth is that interest on the cost of litigation should be calculated from the date of each respective invoice raised by Respondent's legal counsel. Similarly, for interest on counterclaims, it is contended that the accrual of interest should commence from the date when the counterclaim was filed. Further, the Respondent claims that the Goods and Services Tax ("GST") was not claimed by the Respondent in its Statement of Claim, and consequently, the GST amount as well as interest on the same could not have been computed into the Specified Value. Respondent asserts that the actual Specified Value is only INR 1,79,08,623.63, which encompasses claim amount of INR 1,18,34....
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....E CLAIM (A'') (X+ Y'+ Z+ W'+G'') 1,21,21,511.2 TABLE 2 AGGREGATE VALUE OF THE COUNTER CLAIM FILED ON 07.10.2021 Duration Calculation Amount (INR) Counter Claim amount (XX) 52,53,142.88/- 52,53,142.88/- 18% Interest pendente lite and future interest (from date of Notice invoking Arbitration till the date of realization) (YY') 2 years + 10 months + 18 days 2 x (18% of 52,53,142.88/-) + 10/12 x (18% of 52,53,142.88/-) + 18/365 x (18% of 52,53,142.88/-) 18,91,131.44 + 7,87,971.433 + 46,630.6382 = 27,25,733.51 TOTAL AMOUNT (XX + YY') 79,78,876.39/- AGGREGATE VALUE OF THE COUNTERCLAIM (B') (....
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....sts did not claim interest from the date of the arbitration notice. The relevant sections of these documents are reproduced below to provide a detailed reference: "C. Award of cost of litigation necessitated due to arbitrary action of Respondent and Arbitration costs along with interest at the rate of 18% per annum in favour of the Claimant;" ... "Therefore, it is most humbly prayed that this Hon'ble Tribunal may be pleased to pass an Order allowing the Claimant's claim towards Legal Costs amounting to Rs. 4,65,594/- (Rupees Four Lakhs Sixty Five Thousand Five Hundred Ninety Four Only) along with interest @ 18% per annum." (b) GST will not be applied to the 'Cost of Litigation', but it will be app....
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....were due till the date of receipt of payments of the amounts determined by the Hon'ble Arbitral Tribunal. The Claimant is entitled to the commercial rate of borrowing at 18% per annum" The Petitioner relies upon GST Notification No. 13/2017 issued by the Ministry of Finance. This notification clarifies that legal services provided by a firm of advocates are subject to GST. (d) The counter-claim explicitly seeks interest @ 18% per annum from the 'date of counter-claim', and the submissions of the Petitioner mention that the cause of action for counter-claim arose when the contract was illegally terminated. Therefore, the interest is applicable from the date of cause of action. Analysis and directions. 8. The submissio....
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....e Arbitration and Conciliation Act, 1996 ("Act"). The intent is to consider interest only until the arbitration is invoked, thereby establishing a definitive cut-off for calculating the 'aggregate value' for jurisdictional purposes. 10. The calculation presented by the Petitioner conflicts with the proper interpretation of Section 12 of the CCA. It is not permissible to apply interest to the original value of both the claim and counter-claim up until the filing date of petition under Section 34 of the Act. Accepting such a method would imply that in any arbitration case, the Specified Value would continually get revised. Consequently, if the Specified Value is initially below the pecuniary jurisdiction of this Court, it would eventually ....