TaxTMI 
TaxTMI 
2026 (5) TMI 636
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....f the proposal, the consortium incorporated a special purpose vehicle i.e. the respondent for implementing the project. The Concession Agreement dated 09.10.2001 (for short 'CA') was entered between the petitioner and the respondent. The project was on Build Operate and Transfer (for short 'BOT') basis. The construction was completed on 11.10.2004, and the concession period was of seventeen years and six months, ending on 08.11.2019. The project was successfully completed and there is no dispute relating to the completion and operation of the project. The respondent raised a claim for additional cost incurred consequent to change in rates of Minimum Alternate Tax (for short 'MAT') under Chapter XII-B of the Income Tax Act, 1961 (for brevity '1961 Act'), Fringe Benefit Tax (for short 'FBT') under Chapter XII-H of the 1961 Act and Service Tax (for short 'ST') under Chapter V of the Finance Act, 1994. 2.1 The change in rates was subsequent to the proposal due date i.e. 31.05.2001. The respondent vide letter dated 19.04.2012, raised claim. The Independent Engineer forwarded the claim to the independent auditor in terms of Article 11.3(b) of the CA. The petitioner on 05.12.2014, reje....
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....dent was to receive payment of annuity for the stipulated period. Reliance is on communication dated 30.01.2012, to contend that petitioner was put to notice that the profitability of the respondent reduced due to variation in tax rates. The argument is that the share of additional cost for FY 2007-08 to 2012-13 to be borne by the respondent amounting to rupees six crores was reduced and only the balance amount was claimed. 4.2 The argument is that the notifications relied upon by the petitioner to contend that no ST was leviable on services provided for construction and maintenance of roads used by the general public are not applicable. The claim for ST by the respondent was in respect of services rendered by the professionals engaged by the respondent and the hiring of the professionals was in compliance with the terms of the CA. 4.3 Reliance is on the decision of the Supreme Court in Som Datt Builders Ltd. v. State of Kerala, (2009) 10 SCC 259 to contend that reasoned award is not to be equated with a judgment of a court. The reasons implicit from the reading of award as a whole would suffice. Learned senior counsel refers to the written submissions filed before the tribun....
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....ineer, of the following:- i. the nature and the impact of Change in Law on the Project; ii. in sufficient detail, the estimate of the Additional Cost likely to be incurred by the Concessionaire on account of the Change in Law; iii. the measures, which the Concessionaire has taken or proposes to take to mitigate the impact of Change in Law; including in particular, minimising the Additional Cost; iv. the relief sought by the Concessionaire. (b) Upon receipt of the notice of Change in Law issued by the Concessionaire pursuant to the preceding sub-article(a), NHAI and the Concessionaire shall along with the Independent Engineer hold discussions and take all such steps as may be necessary including determination/certification by the Independent Engineer and where necessary by the Independent Auditor of the Additional Cost and to determine the quantum of the Additional Cost to be borne and paid by NHAI. (c) NHAI shall within 30 days from the date of determination of quantum of Additional Cost, provide relief to the Concessionaire in either of the following ways: i. by lump-sum reimbursement of the Additional Cost to the Conc....
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.... Financial Year Minimum Alternate Tax (MAT) (a) Fringe Benefit Tax (FBT) (b) Service Tax (ST) (c) Total of Additional Cost (d)= (a)+(b)+(c) Amount to be borne by Concessionaire (e) Share of Additional cost to be borne by NHAI (f)= (d)-(e) 2007-08 92,05,272 6,15,225 11,49,441 1,09,69,938 1,00,00,000 9,69,938 2008-09 1,03,70,252 4,44,324 6,66,995 1,14,81,571 1,00,00,000 14,81,571 2009-10 4,05,80,618 0 22,22,327 4,28,02,945 1,00,00,000 3,28,02,945 2010-11 2,62,33,044 0 19,84,999 2,82,18,043 1,00,00,000 1,82,18,043 2011-12 2,91,56,640 0 28,55,846 3,20,12,486 1,00,00,000 2,20,12,486 2012-13 1,59,87,589 0 42,90,447 2,02,78,036 1,00,00,000 1,02,78,036 TOTAL 13,15,33,415 10,59,549 1,31,70,055 14,57,63,019 6,00,00,000 8,57,63,019 Financial Year (FY) Increase in tax rate under MAT (In %) Increase in tax rate under FBT (In %) Increase in tax rate under ST (In %) Share of Additional cost to be borne by NHAI due to differential tax liability caused by increase in MAT, FBT and ST....
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....risdiction of the arbitrator to decide, if there was no evidence at all and if the arbitrator makes an award of the amount claimed in the claim statement, merely on the basis of the claim statement without anything more, it has to be held that the award on that account would be invalid. Suffice it to say that the entire award under this head is wholly illegal and beyond the jurisdiction of the arbitrator, and wholly unsustainable." (emphasis supplied) 11. As per Article 11 the respondent was to bear the additional cost incurred up to rupees one crore in each accounting year and could claim only the amount in excess thereof. From the tabulated statement placed before the tribunal, it is not forthcoming that such deduction was made for the FY 2013-14 to 2015-16. No evidence was adduced to prove that the amount claimed for these FY was in accordance with Article 11 of the CA. 12. Section 31(3) of the Act mandates a reasoned award. The law is well settled that the requirement of Section 31(3) of the Act is not a mere formality. The reasoning in an appropriate case can be implied upon a fair reading of the award and the documents referred to therein. Reference is to the d....