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TMI Blog2019 (6) TMI 1148X X X X Extracts X X X X X X X X Extracts X X X X ..... the aforenoted Judgments regarding the interpretation of the contract, view taken by the learned Arbitrator cannot be faulted. Appeal dismissed. - APPEAL NO. 284, 286, 287, 288, 290 OF 2019 IN ARBITRATION PETITION NO. 214, 210, 364, 211, 218 OF 2014 - - - Dated:- 14-6-2019 - PRADEEP NANDRAJOG, C.J. N. M. JAMDAR, JJ. Mr. Rajesh Mirchandani for the Appellant. None for the Respondent. JUDGMENT (Per Chief Justice) 1. Having heard learned Counsel for the Appellant in the five captioned Appeals which lay a challenge to a singular Judgment dated 18.02.2019 dismissing five Arbitration Petitions filed under Section 34 of the Arbitration and Conciliation Act, 1996 challenging five Awards of even date, we find no case made out to issue notice to the Respondent and thus dismiss the Appeals in limine. 2. The matter of the dispute before the Arbitrator was five contracts of different dates having identical terms whereunder the Respondent was functioning as the handling and transport contractor of the Appellant. Reimbursing the contractor service tax deposited by the contractor with the Income Tax Department, the Appellant took a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -based services cover service providers such as architects, interior designers, real estate agents, construction services, mandapwalas etc. and the later being services provided by stock-brokers, practising chartered accountants, practising cost accountants, security agencies, tour operators, event managers, travel agents etc. 6. In the decision reported as AIR 2012 SC 2829 Rashtriya Ispat Nigam Ltd.vs. M/s Dewan Chand Ram Saran it was held: 26. As far as the submission of shifting of tax liability is concerned, as observed in paragraph 9 of Laghu Udyog Bharati (Supra), service tax is an indirect tax, and it is possible that it may be passed on. Therefore, an Assessee can certainly enter into a contract to shift its liability of service tax. Though the Appellant became the Assessee due to amendment of 2000, his position is exactly the same as in respect of Sales Tax, where the seller is the Assessee, and is liable to pay Sales Tax to the tax authorities, but it is open to the seller, under his contract with the buyer, to recover the Sales Tax from the buyer, and to pass on the tax burden to him. Therefore, though there is no difficulty in accepting that afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns in full. This saves space and also attracts the case law and other learning attached to the earlier provision. Its main advantage is a Parliamentary one, however, since it shortens Bills and cuts down the area for debate. 11. In the decision reported as 2011 (3) SCC 1 Girnar Traders vs. State of Maharashtra Ors., the Constitution Bench while dealing with legislation by incorporation held that with the development of law, the legislature has adopted the common practice of referring to the provisions of the existing statute while enacting new laws. It was held that reference to an earlier law in the later law could be a simple reference of provisions of the earlier statute or a specific reference where the earlier law is made an integral part of the new law, that is, by incorporation. In contrast to such simple reference, legal incident of legislation by incorporation is that it becomes part of the existing law which implies bodily lifting provisions of one enactment and making them part of another and in such cases, subsequent amendments in the incorporated Act could not be treated as part of the incorporating Act. The obvious advantage of legislation by incorpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payable, the seller may add so much to the contract price as will be equivalent to the amount paid or payable in respect of such tax or increase of tax, and he shall be entitled to be paid and to sue for and recover such addition; and (b) if such decrease or remission so takes effect that the decreased tax only, or no tax, as the case may be, is paid or is payable, the buyer may deduct so much from the contract price as will be equivalent to the decrease of tax or remitted tax, and he shall not be liable to pay, or be sued for, or in respect of, such deduction. (2) The provisions of Sub-section (1) apply to the following taxes, namely;- (a) any duty of customs or excise on goods; (b) any tax on the sale or purchase of goods. This section also clearly says that unless a different intention appears from the terms of the contract, in case of the imposition or increase in the tax after the making of a contract, the party shall be entitled to be paid such tax or such increase. In this connection, the intention of the parties is to be ascertained, as per the clauses mentioned above . 14. In the decision reported as 1997 (5) SCC 536 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions have no place where a claim is made under the said provision. What those equitable considerations should be is not a matter of law. That depends upon the facts of each case. But to say that equitable considerations have no place where a claim is founded upon Section 72 is, in our respectful opinion, a contradiction in terms. Indeed, in Kanhaiyalal, the Court accepts that the right to recover the taxes - or the obligation of the State to refund such taxes under Section 72 of the Contract Act is subject to questions of estoppel, waiver, limitation or the like , but at the same time, the decision holds that equitable considerations cannot be imported because of the clear and unambiguous language of Section 72. With great respect, we think that a certain amount of inconsistency is involved in the aforesaid two propositions. Estoppel, waiver...or the like , though rules of evidence, are yet based upon rules of equity and good conscience. So is Section 72. We are, therefore, of the opinion that equitable considerations cannot be held to be irrelevant where a claim for refund is made under Section 72. Now, one of the equitable considerations may be the fact that the person claimi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed on. It is a presumption of fact which a Court is entitled to draw under Section 114 of the Indian Evidence Act the same being undoubtedly a rebuttable presumption but the burden of rebutting it lies upon the person who claims the refund and it is for him to allege and establish that as a fact he has not passed on the duty and, therefore, equity demands that his claim for refund be allowed. 16. Thus as a legislation by reference sub-Section (2) of Section 64A of the Sales of Goods Act making applicable sub-Section (1) of Section 64A to any duty of Customs or Excise on goods and as a legislation by incorporation Section 83 of the Finance Act making applicable Section 12B of the Central Excise Act to Service Act, Section 64A(1) is applicable to Service Tax. From the provisions as noted and the decisions of the larger benches it is evident that a service tax is a VAT which in turn is a destination based consumption tax and is to be borne by the consumer of goods. Further, unless contracted to the contrary, the consumer of service is liable to refund the said tax to the service provider who in turn is liable to pay to the government. 17. From the legal position ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fe) to conclude that the parties must, for whatever reason, have used the wrong words or syntax: see Mannai Investments Co. Ltd. v. Eagle Star Life Assurance Co. Ltd. [1997] A.C. 749. (5) The rule that words should be given their natural andordinary meaning reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had. Lord Diplock made this point more vigorously when he said in Antaios Compania Naviera S.A. v. Salen Rederierna A.B. [1985] A.C. 191, 201: if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business commonsense, it must be made to yield to business commonsense. 19. In the decision reported as [2009] 2 All ER, 26 Durham vs. BAI (Run Off) Ltd.(in scheme of arrangement) Ors. the Queen s Bench Division while dealing with the construction of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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