2024 (3) TMI 22 - AT - Insolvency and Bankruptcy

Rejection of section 9 application filed by the Appellant - pre-existing dispute - Allegations have been made in the email that excess amount has been paid to the Appellant and email also says that excess amount should be refunded - HELD THAT - The submissions of the Learned Counsel for the Appellant that work was completed in March, 2021 and email sent was only moonshine defence cannot be accepted. Averments made in the email raises clear dispute which cannot be said to be moonshine. As per the submission of the Appellant that Corporate Debtor has taken input on the tax invoice sent by the Appellant. It is on record that advance payments were made by the Corporate Debtor and issues whether input tax taken is in excess is the issue which could not be gone into in proceeding under Section 9 of the Code. It is observed that it shall be open for the Appellant to take such remedy as available under the contract if there are any dues. Appeal dismissed.

Summary

Issues:
The judgment involves the rejection of a Section 9 application by the Appellant due to a pre-existing dispute.

Summary:
The Appellant issued a demand notice on 18th August, 2022, followed by a Section 9 Application. The Corporate Debtor claimed a pre-existing dispute in their reply, citing an email dated 11th July, 2022, which highlighted shortcomings in the work and requested a refund of excess payment. The Adjudicating Authority rejected the Application under Section 9 based on the existence of a pre-existing dispute.

The Appellant argued that all work was completed in 2021, tax invoices were issued, and the email pointing out deficiencies was sent only on 11th July, 2022. They contended that the dispute raised by the Corporate Debtor was unfounded.

Upon review, the Tribunal examined the email dated 11th July, 2022, which outlined the Corporate Debtor's grievances regarding incomplete work and excess payments made to the Appellant. The Tribunal noted that the dispute raised in the email was substantial and not merely a baseless claim. While the Appellant asserted that the Corporate Debtor had taken input tax based on the tax invoice, the Tribunal clarified that issues related to input tax could not be addressed under Section 9 proceedings. The Tribunal suggested that the Appellant pursue other remedies available under the contract for any outstanding dues.

In conclusion, the Tribunal dismissed the Appeal, emphasizing the presence of a genuine dispute regarding the completion of work and excess payments, which warranted further resolution outside the scope of Section 9 proceedings.