Kavis Fashions Private Limited vs. Rupani Spinning Mills Private Limited

Held

The Court held that the points relating to GST and TDS were never argued during the original hearing of the Writ Petition, and therefore, the Review Petitioner could not be permitted to raise them now. The Court stated that it is the Respondent's liability to pay GST on license fees received, and the deposit amount should not be reduced on the plea of non-payment of GST. Regarding TDS, the Court found that a detailed inquiry would be required to match the claimed TDS deposit with actual payments, which is not permissible in a review petition. Furthermore, the TDS-related documents (Form-16A) were not produced during the original hearing. However, the Court found an error concerning the calculation of license fees for the period March 2020 to August 2022. While the Trial Court determined the total payable amount to be Rs. 66,99,692/-, it also noted that Rs. 27,32,607/- had been paid, leaving Rs. 39,67,085/- as the actual liability. The High Court, in its previous order, had erroneously treated the entire Rs. 66,99,692/- as payable. To this limited extent, the Review Petition was allowed. The Court directed the Appellant-Defendant to deposit a further amount of Rs. 75,00,000/- under Order 15A of the Code of Civil Procedure, modifying the previous order.

Facts

The Review Petitioner, Kavis Fashions Private Limited, filed a review petition seeking to correct alleged errors in a High Court judgment dated November 1, 2023. The errors pertained to the calculation of license fees and Goods and Services Tax (GST) and Tax Deducted at Source (TDS). The petitioner argued that the court erroneously assumed a monthly license fee of Rs. 19,32,606/-, when the actual amount was Rs. 16,37,802/-, with the remainder being GST. Additionally, the court allegedly miscalculated the license fees payable from March 2020 to August 2022 as Rs. 66,99,692/-, whereas the correct amount was Rs. 39,67,085/-. The petitioner also contended that an amount of Rs. 19,31,250/- deposited towards TDS was not factored in.

Key Issues

1. Whether the Court erroneously assumed the monthly license fee payable to be Rs. 19,32,606/-, when the actual license fee was Rs. 16,37,802/- and the balance was GST, and whether this constitutes an error apparent on the face of the record. (Petitioner's contention: Yes, the court erred by including GST in the license fee calculation, and the Respondent should not benefit from the GST amount which is payable to the government. Revenue's contention: Not argued during the original hearing.) 2. Whether the Court erroneously considered the amount payable towards license fees from March 2020 to August 2022 as Rs. 66,99,692/-, when the correct amount payable was Rs. 39,67,085/-, and whether this is an error apparent on the face of the record. (Petitioner's contention: Yes, the court failed to consider that Rs. 27,32,607/- had already been paid, leaving Rs. 39,67,085/- as the actual payable amount. Revenue's contention: Not argued during the original hearing.) 3. Whether the Court failed to factor in the amount of Rs. 19,31,250/- deposited by the Appellant towards TDS to the credit of the Respondent, and whether this constitutes an error apparent on the face of the record. (Petitioner's contention: Yes, this amount was deposited and should have been considered. Revenue's contention: Not argued during the original hearing.)