Hari Narayan Rai vs. Union Of INDIA And 4 Others
Facts
The petitioner, Hari Narayan Rai, filed a writ petition challenging the applicability of GST on payments made against running bills. The dispute arose from an agreement executed prior to the enforcement of GST, which stipulated that taxes would be realized as applicable. The petitioner questioned whether GST could be levied on payments under this pre-existing agreement. The Court noted that the agreement contained an arbitration clause, suggesting an alternative dispute resolution mechanism.
Held
The Court held that the writ petition was not liable to be entertained at this stage. The primary reason was the existence of an arbitration clause within the agreement executed between the parties. The Court found that it was open to the petitioner to invoke this arbitration clause to resolve the dispute concerning the interpretation of the agreement's terms, particularly regarding the applicability of GST. Therefore, the Court dismissed the writ petition, leaving it open for the petitioner to pursue arbitration if they so advised. The Court did not decide on the merits of whether GST was applicable, but rather on the procedural appropriateness of the writ petition given the arbitration clause.
Key Issues
1. Whether GST can be charged on payments of running bills under an agreement executed prior to the enforcement of GST, which stipulated that tax shall be realized as applicable? The petitioner contended that the agreement was executed before the GST regime, and its terms should govern the tax liability. The petitioner likely argued that the phrase 'tax shall be realized as applicable' referred to the tax regime in place at the time of the agreement, not subsequent legislation like GST. The revenue or State's argument is not recorded in the judgment. The Court framed the issue as one of interpretation of the terms of the agreement.
AI-generated summary — verify with the full judgment below
Court No. - 21 Case :- WRIT TAX No. - 675 of 2018 Petitioner :- Hari Narayan Rai Respondent :- Union Of India And 4 Others Counsel for Petitioner :- Bharat Pratap Singh,Nand Kishore Singh Counsel for Respondent :- A.S.G.I.,C.S.C.,Om Prakash Srivastava Hon'ble Krishna Murari,J.
Hon'ble Ashok Kumar,J.
The issue raised in this petition is as to whether on an agreement having been executed prior to enforcement of the GST providing that the tax shall be realised as applicable, any GST can be charged on payment of the running bills.
The issue is in respect of the interpretation of the terms of the agreement executed between the parties. There is an arbitration clause in the said agreement and it is open to the petitioner to invoke the said clause and this petition for interpretation of the terms of the agreement, at this stage, is not liable to be entertained.
Writ petition, accordingly, stands dismissed leaving it open to the petitioner to invoke the arbitration clause, if so advised.
Order Date :- 24.4.2018 VKS
The judgment continues below.
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