Goa Shipyard Limited, Thr. Its Auth. Rep. Kishore Manohar Samant vs. Soft Shipyard PVT. LTD., Thr. Its Rep. R Ram Garg
Held
The Court held that the Petitioner/Judgment Debtor is not liable to pay GST on the interest awarded under arbitration. This decision was based on the ruling of the Gujarat Authority for Advance Ruling dated 26.06.2025, which clearly stated that GST is not payable on "interest awarded under arbitration" and "costs awarded under arbitration". The Court found this ruling to be decisive. Consequently, the impugned orders of the Executing Court, which directed the Petitioner to pay GST on the part payment of interest, were quashed and set aside. The Executing Court was directed to proceed with the execution of the arbitral awards in accordance with law, without the GST component on interest. No issue was expressly left undecided.
Facts
The Petitioner, Goa Shipyard Limited, is the Judgment Debtor in five execution applications filed by the Respondent, Shoft Shipyard Pvt. Limited, to execute arbitral awards. The Respondent sought directions from the Executing Court to compel the Petitioner to pay 18% GST on part payments of interest due under the awards. The Executing Court granted this relief, ordering the Petitioner to pay the GST. These five orders are under challenge. During the pendency of the petitions, the Respondent obtained an Advance Ruling from the Gujarat Authority for Advance Ruling on GST. The Gujarat AAR ruled that the Respondent is not liable to pay GST on "interest awarded under arbitration" and "costs awarded under arbitration". Consequently, the High Court was informed of this ruling.
Key Issues
1. Whether the Petitioner/Judgment Debtor is liable to pay GST on the part payment of interest awarded under arbitration, as directed by the Executing Court (turning on the interpretation of GST provisions concerning interest awarded in arbitration). Contentions: Petitioner: Argued that the Executing Court's orders directing payment of GST on awarded interest were erroneous. Relied on the subsequent ruling of the Gujarat Authority for Advance Ruling which held that GST is not payable on awarded interest and costs. Respondent: Initially sought directions for the Petitioner to pay GST on awarded interest. Subsequently, placed on record the ruling of the Gujarat Authority for Advance Ruling which stated that GST is not payable on awarded interest and costs.
Sections Cited
Not specified in the judgment
AI-generated summary — verify with the full judgment below
16-20 WP -770-2024 & ORS (1).odt Meena IN THE HIGH COURT OF BOMBAY AT GOA WRIT PETITION NO.770 OF 2024 WITH WRIT PETITION NO.771 OF 2024 WITH WRIT PETITION NO.773 OF 2024 WITH WRIT PETITION NO.776 OF 2024 WITH WRIT PETITION NO.777 OF 2024 Goa Shipyard Limited A company incorporated under the Laws of India Having its oice at Vasco da Gama Goa–403 802 hrough its authorised Representative Mr. Kishore Manohar Samant Son of late Manohar Sitaram Sawant Aged 58 years, R/o H.No.196/1/10, Surya Nagar Colony, Zuari Nagar, Sancoale, Goa ..... Petitioner Versus Shoft Shipyard Pvt. Limited, A company incorporated under the Laws of India, Having its oice at Plot No.A-365,Road No.2B, Wagle Industrial Estate, hane- 400 604 through its Representative R Ram Garg, General Manager, ... Respondent Mr. S.D. Padiyar, Senior Advocate with Mr. Gaurish Agni and Mr. Prayash Shirodkar, Advocates for the Petitioner. Mr. Nikhil Pai with Mr. Narsimha Vernekar, Advocates for the Respondent. 16-20 WP -770-2024 & ORS (1).odt CORAM:- VALMIKI MENEZES, J. DATED :- 6th August, 2025 ORAL JUDGMENT:
Heard learned Counsel for the parties.
Rule. Rule made returnable forthwith with the consent of the pa
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