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2024 (6) TMI 430 - HC - GSTRestriction/negation on petitioner s claim for the GST amounts altogether - Agreement between the respondent/assignee and the renter has come to an end - proper forum to decide the amounts which the petitioner is entitled to - HELD THAT - This Court is of the view that whether the Lease Agreement has come to an end by efflux of time would not have a bearing on the petitioner s claim or demolish the petitioner s claim in totality. Admittedly, the respondent received receivables from the renters during subsistence of the Agreement between the respondent and the renters. Hence, any amount which the respondent collected as part of the GST component from the renter/s would be the petitioner s entitlement in terms of the two Assignment Agreements. Proper forum to decide the amounts which the petitioner is entitled to - HELD THAT - The arbitral tribunal will be the proper forum to decide the amounts which the petitioner is entitled to in terms of these Agreements and also adjudicate on any construction of the clauses of the Agreements which the respondent seeks to argue before this Court. Till that adjudication is done, the Court is inclined to grant a limited protection to the petitioner in the form of a restraint on the respondent from dealing with the Escrow Account bearing no.2105107000000044 in the respondent bank. The interim order will be subject to the formation of the arbitral tribunal and until the parties can approach the tribunal for continuing the interim protection or otherwise under Section 17 of the 1996 Act. Application allowed.
Issues involved: Interpretation of clauses in Assignment Agreements, entitlement to GST component, impact of Lease Agreement termination on claim.
The judgment by the High Court of Calcutta pertains to a dispute between a petitioner and a respondent regarding an Assignment Agreement executed on 17th January, 2019, and a subsequent agreement on 12th June, 2019. The key contention revolves around the respondent's obligation to provide the GST component of receivables to the petitioner. The Court's decision was influenced by a previous judgment on related issues dated 9th August, 2023, which restrained the respondent from dealing with amounts in Escrow Accounts until arbitration proceedings under Section 17 of The Arbitration and Conciliation Act, 1996 could take place. The Court noted that the termination of the Lease Agreement between the respondent/assignee and the renter does not nullify the petitioner's claim for the GST amounts. The respondent had received receivables during the subsistence of the Agreement, making any GST component collected from the renters the petitioner's entitlement as per the Assignment Agreements. The Court emphasized that the arbitral tribunal is the appropriate forum to determine the petitioner's entitlement and interpret the clauses of the Agreements contested by the respondent. To safeguard the petitioner's interests until arbitration proceedings, the Court granted interim protection by restraining the respondent from dealing with the Escrow Account in the respondent bank. This protection is contingent upon the formation of the arbitral tribunal and will remain valid for six weeks or until the tribunal is approached for further relief under Section 17 of the 1996 Act. The Court allowed the application and appointed Ms. Chama Mukherjee as the Arbitrator, subject to her consent within three weeks. In conclusion, the Court's decision in AP-COM/408/2024 provides temporary relief to the petitioner, ensuring the preservation of funds pending arbitration proceedings. The appointment of an Arbitrator signifies progress towards resolving the dispute in accordance with the Assignment Agreements and relevant legal provisions.
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