TaxTMI 
TaxTMI 
2026 (7) TMI 2009
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.... the petitioner till 05.07.2021. Pursuant to implementation of Goods and Services Tax (for short 'GST') the respondent raised invoices for reimbursement of GST on the transmission charges of natural gas (hereinafter referred to as the 'tax paid'). 2.1 The arbitration proceeding was initiated claiming refund of the GST amount reimbursed to the respondent. The case set up by the petitioner is that the sale of natural gas was governed by the Andhra Pradesh Value Added Tax Act, 2005 (hereinafter referred to as the 'AP VAT Act') and no GST was leviable. Further that there was no transmission of gas by the respondent to the petitioner, rather the movement of gas was from one unit of the respondent to another unit. 2.2 The tribunal rejected the claim holding that as per the clauses of GSA, the tax paid was to be reimbursed by the petitioner and the Value Added Tax (for short 'VAT') was payable on the price inclusive of tax paid. It was considered that the petitioner under Clause 12.6 of GSA had not challenged the quantification of the bill within fourteen days of receipt of the invoice. The principle of estoppel was invoked and the tribunal further held that the petitioner waived right....
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.... to pay for more than three years and also after raising objection. The decision of the Supreme Court in Sepco Electric Power Construction Corporation vs. GMR Kamalanga Energy Ltd., 2025 INSC 1171 and Abdulla Ahmed v. Animendra Kissen Mitter, 1950 SCC OnLine SC 2 are pressed into service to buttress the argument that despite Clause 18.1 of GSA, there can be a waiver of rights otherwise than expressly in writing. 4.2 It is contended that the petitioner during the subsistence of GSA never challenged the leviability of GST on transmission of Gas. Moreover, the issue of taxability of the transmission of gas under the GST regime was never in issue in arbitration and this was taken note of by the Court while appointing the arbitrator. 4.3 It is submitted that the view taken by the tribunal is a plausible one and does not warrant interference merely for another possible view. Reliance is placed on the decision of the Supreme Court in Consolidated Construction Consortium Limited v. Software Technology Parks of India, (2025) 7 SCC 757. 4.4 The contention is that scope under Section 34 of the Act is limited and the interpretation of the terms of the contract and appreciation of evid....
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....he same in the next invoice to be raised. The SELLER undertakes to consider the claim of the BUYER within a period of 30 (Thirty) days from the receipt of such claim, if found acceptable. Failure of the BUYER to put forward any claim within the time above specified shall be an absolute waiver of any claim. Clause 18.1 Waiver No breach of any provisions of this Agreement will be waived except with the express written consent of the party not in breach. Any waiver or delay by any Party of any default by any of the other party or Parties in the performance of this Agreement shall not operate as a waiver of any other default of that Party or those Parties." ANALYSIS 8. The tribunal dealt three facets of the controversy. Firstly, whether the burden of tax paid, including the transmission from one unit of the respondent to another unit could be passed on to the petitioner? Secondly, whether the respondent deposited the tax on the cost of transmission of gas with GST authorities? Lastly, whether the petitioner was estopped from raising the issue after having reimbursed the tax paid for more than three years and had in fact waived the right to object? FIRST FACET....
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....tract and its terms is a matter for the arbitral tribunal to determine. Unless the same is found to be one that no fair-minded or reasonable person would arrive at, it cannot be interfered with. If there are two plausible interpretations of the terms of a contract, then no fault can be found if the arbitrator accepts one such interpretation as against the other. To be in conflict with the public policy of India, the award must contravene the fundamental policy of Indian law, which makes it narrower in its application." 12.2 In Parsa Kente Collieries Limited. v. Rajasthan Rajya Vidyut Utpadan Nigam Limited, (2019) 7 SCC 236 held as under:- "9.1. In Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204], this Court had an occasion to consider in detail the jurisdiction of the Court to interfere with the award passed by the Arbitrator in exercise of powers under Section 34 of the Arbitration Act. In the aforesaid decision, this Court has considered the limits of power of the Court to interfere with the arbitral award. It is observed and held that only when the award is in conflict with the public policy in India, the Court would be justifi....
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....ents and the objection raised by the petitioner were not decided. The tribunal in order dated 15.05.2024, recorded that the petitioner had not cross-examined RW-2 qua the tax deposit receipts. The tribunal further recorded that the petitioner stated that the tax receipts produced along with the affidavit were not admissible and were not being subject matter of cross-examination. The tribunal without deciding the issue of admissibility erred in recording the finding that GST was deposited, more so when except for the annexed tax receipts no evidence was produced by respondent to prove deposit of tax. 15. The division bench of Bombay High Court in Bi-Water Penstocks Ltd. v. Municipal Corporation Of Gr. Bombay, 2010 SCC OnLine Bom 1784 held that the admission of documents without having been proved is not only a procedural defect but also a violation of the principles of natural justice. Relevant paragraph is reproduced: "18. Considering the case law on the subject and facts and circumstances of the case, in Our view, admitting certain documents in evidence by the Arbitrator, without the same being proved, is an act of legal misconduct. In our view, in blatant breach of th....
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....smission and other components of tax, as the respondent was duty bound to claim GST amount. 75. The argument raised by the claimant that no GST invoice has been raised by the respondent on the claimant, therefore, the claimant has been deprived of claiming input credit. The product - electricity produced by the claimant is exempt from payment of GST; therefore, the claimant may not be eligible for input tax credit. This Tribunal has not been apprised of the fact whether the transmission of gas by the transmission pipeline was exclusively for the claimant or if the gas was being supplied to the other entities by a common pipeline, with the last delivery point specific to the unit. The question as to whether a GST invoice was required to be issued or the consequences arising from the non-issuance of GST invoices is an issue that could have been raised or should have been raised before the GST authorities during the contract period. The claimant, having accepted the situation of GST being levied on the transmission charges and paid voluntarily the GST and Vat amount as claimed by the respondents, for more than three years, cannot now argue that because GST invoices were not i....
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....the proper opportunity after the land was transferred to him, and no covenant to treat the appellants as thika tenants could be shown to have run with the land. Waiver is distinct from estoppel in that in waiver the essential element is actual intent to abandon or surrender right, while in estoppel such intent is immaterial. The necessary condition is the detriment of the other party by the conduct of the one estopped. An estoppel may result though the party estopped did not intend to lose any existing right. Thus voluntary choice is the essence of waiver for which there must have existed an opportunity for a choice between the relinquishment and the conferment of the right in question. Nothing of the kind could be proved in this case to estop the first respondent." 23.2 In Article 1175 at p. 637 of Halsbury's Laws of England, 3rd Edn., Vol. 14, it is stated: "1175. Waiver is the abandonment of a right, and is either express or implied from conduct. A person who is entitled to the benefit of a stipulation in a contract or of a statutory provision (a) may waive it...."" "The essence of waiver is 'estoppel' and where there is no 'estoppel' there can be no 'wa....
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....e made to the following decisions of the Supreme Court: 24.1 In Kalpraj Dharamshi v. Kotak Investment Advisors Ltd., (2021) 10 SCC 401 it was held: "121. It has been held, that a waiver cannot always and in every case be inferred merely from the failure of the party to take the objection. Waiver can be inferred, only if and after it is shown that the party knew about the relevant facts and was aware of his right to take the objection in question. The waiver or acquiescence, like election, presupposes, that the person to be bound is fully cognizant of his rights, and that being so, he neglects to enforce them, or chooses one benefit instead of another. 122. As such, for applying the principle of waiver, it will have to be established, that though a party was aware about the relevant facts and the right to take an objection, he has neglected to take such an objection. 127. Thus, for constituting acquiescence or waiver it must be established, that though a party knows the material facts and is conscious of his legal rights in a given matter, but fails to assert its rights at the earliest possible opportunity, it creates an effective bar of waiver against ....
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....ht to object. 26. For invoking estoppel there has to be a representation with the intention that it be acted upon by the other party; the representation must be relied upon and the promisee should alter its position. There was no unequivocal representation by the petitioner for reimbursement of the tax paid. Moreover, it is not a case of the respondent that it changed its position by acting upon any representation if any made by the petitioner. 26.1 In Motilal Padampat Sugar Mills Co. Ltd. (supra) the Supreme Court examined the doctrine of prmomissory estoppel. The principles emerging from the decision are: (i) definite and unequivocal representation or promise; (ii) the representation must be intended, or made with knowledge, that it would be acted upon by the promisee; (iii) the promisee must have actually relied upon the promise; (iv) the promisee must have altered his position on the basis of such reliance, though proof of detriment is not required; and (v) being an equitable doctrine, it can be defeated only where overriding public interest so demands, are missing. 26.2 The Supreme Court in Chhaganlal Keshavlal Mehta Mehta ....