2022 (12) TMI 1030 - HC - GST

Seeking reference of the dispute to arbitration - Sections 7 and 8 of the Arbitration and Conciliation Act, 1996 - HELD THAT - Insofar as the grievance of the petitioner as regards impugned endorsement dated 10.08.2022 at Annexure-T rejecting its request to file the GST returns by changing the authorized signatory/e-mail and mobile number and make payments on the ground that till July, 2022, respondent No.3 was filing returns and that he had made irregular payments is concerned, the said issue also would necessarily have to be decided by the Arbitral Tribunal during the course of the arbitration proceedings. However, having regard to the undisputed fact that respondent No.3 had filed GST returns till July, 2022 and the GSTIN and user ID stand in his name, without prejudice to the rights and contentions of both parties before this Court, before GST authorities as well as in the arbitration proceedings and for limited purpose of enabling the returns to be filed on behalf of the petitioner firm, it is deemed just and appropriate to permit respondent No.3 herein to file GST returns on behalf of the petitioner - firm, for which necessary papers would be provided by Sri C.N.Raju and Sri P.S.Biju to respondent No.3. The dispute between the parties pursuant to the order hereby stands referred for arbitration to Arbitration and Conciliation Centre. The Arbitration Centre is directed to proceed with arbitration by constituting an Arbitral Tribunal comprising of the sole Arbitrator i.e., Sri V.V.Angadi, retired District Judge, who shall conduct the proceedings at the Arbitration and Conciliation Centre (Domestic International), Khanija Bhavan, Bengaluru - application disposed off.

Summary

Issues:
Petition seeking quashing of an endorsement dated 10.08.2022, Referral of dispute to arbitration, Dispute over GST returns filing and payments.

Analysis:

1. Quashing of Endorsement: The petitioner, a Partnership Firm, sought to quash an endorsement dated 10.08.2022 issued by respondent No.2. The High Court considered the material on record and the parties involved, including the three original partners of the firm. The Court noted the suit filed by one of the partners seeking various reliefs and the subsequent order referring the matter to arbitration. The Court observed that the inter se dispute between the partners had been referred for resolution to arbitration.

2. Referral to Arbitration: The Court acknowledged that the parties had not reached a consensus on the choice of arbitrator. However, based on joint submissions, it directed the dispute to be referred to a retired District Judge for arbitration at the Arbitration and Conciliation Centre, Bengaluru. The Court emphasized the importance of resolving the dispute through arbitration and facilitating the process by appointing a sole arbitrator.

3. Dispute over GST Returns: The Court addressed the issue of filing GST returns and making payments, noting the petitioner's grievance regarding the rejection of a request to change the authorized signatory. Despite the dispute, the Court allowed respondent No.3 to file GST returns on behalf of the firm, with necessary papers provided by the other partners. The Court emphasized that this permission did not create any new rights for respondent No.3 and directed cooperation between the parties for filing returns and other related actions.

4. Final Orders: In conclusion, the Court issued specific directions: referring the dispute to arbitration, allowing respondent No.3 to file GST returns, emphasizing cooperation between the parties, and keeping all claims and contentions open. The Court disposed of the writ petition while ensuring communication of the order to the Arbitration & Conciliation Centre and the appointed arbitrator. The judgment aimed to streamline the arbitration process and address the ongoing disputes effectively while maintaining the rights and responsibilities of the involved parties.