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Issues Involved:
1. Whether the appellant is required to reimburse the service tax levied post the acceptance of the bid of the respondent. Summary: Issue 1: Reimbursement of Service Tax Post Acceptance of Bid 1. This is an appeal preferred against the judgment of the learned Single Judge dated 19.09.2011. By virtue of the said judgment the learned single Judge has dismissed the objections filed by the appellant u/s 34 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as the said Act). The only issue which arises for consideration before us, is: whether the appellant is required to reimburse the service tax, which came to be levied, post the acceptance of the bid of the respondent? 2. The said issue arises in the background of the following facts which we will shortly notice hereinafter. 2.1 The respondent herein was awarded a contract for maintenance of ring road and outer ring road for a period of three (3) years by the appellant. In respect of the said contract a bid was submitted by the respondent on 15.04.2005. The said bid was accepted on 06.07.2005. A formal contract was executed as between the appellant and the respondent (hereinafter collectively referred to as the parties), on 24.08.2005. 2.2 It would be important to note that in the interregnum a notification was issued qua imposition of service tax on road maintenance. The said notification was issued on 27.07.2005; which was brought into effect from 16.06.2005. 2.3 The period for execution of the contract commenced from 24.08.2005 (i.e., the date when a formal contract was executed) and, it was stipulated to end on, 23.08.2008. 2.4 It is with the issuance of the notification dated 27.07.2005, that a dispute arose between the parties on the recoverability of the service tax imposed on the respondent. Consequently, the disputes in the first instance, under the mechanism encapsulated in the contract, were referred to the Dispute Resolution Expert, i.e., the Chief Engineer, PWD, Maintenance Zone M-3, in terms of clause 21.1 of the General Conditions of the Contract (in short GCC). 2.5 The recommendation of the aforementioned expert, went against the respondent, which propelled the respondent to invoke the arbitration clause under the GCC. In terms of clause 22 of the GCC, the arbitration was invoked and commenced. After completion of pleadings, evidence was led before the learned arbitrator. The learned arbitrator made and published an award on 15.06.2009. 2.6 Aggrieved by the award, a petition u/s 34 of the said Act was preferred by the appellant. The said petition was numbered as: OMP No. 578/2009. To cut a long story short, this court allowed the OMP, on the short ground, that the arbitrator had taken into account the circular dated 28.01.2009 to come to the conclusion that the appellant was required to reimburse the service tax, without giving due opportunity to the appellant to explain the effect of the circular dated 28.01.2009. Resultantly, the said award was set aside, and the matter was remanded to the arbitrator, for a fresh adjudication on the said issue. 2.7 After the remand, the learned arbitrator heard the parties once again, in respect of the issue of the reimbursement of service tax. Once again, the arbitrator by an award dated 11.05.2010, came to the same conclusion. This time, however, the arbitrator observed that even if he were to exclude the circular dated 28.01.2009 from the purview of his reasoning, he would still come to the same conclusion, which he had, in his first award dated 15.06.2009. 2.8 The appellant did not rest its case with said decision, and consequently, took the matter further by filing an OMP, in this court. This time the OMP was numbered as: 496/2010. As noticed hereinabove, the learned Single Judge by virtue of the impugned judgment dismissed the objections of the appellant. 2.9 Ms Zubeda Begum, appearing for the appellant, both before the learned single Judge and before us, has raised somewhat similar pleas. The first plea of Ms Zubeda Begum, is that, the contract between the parties, in particular clause 13.3
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