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2024 DIGILAW 519 (MP)

Azad Jain And Associates v. M. P. Road Development Corporation

2024-07-25

VISHAL DHAGAT

body2024
ORDER : Appellant has filed this appeal under Section 37 of the Arbitration and Conciliation Act, 1996. 2. Learned Senior Counsel appearing for appellant submitted that despite raising repeated claims for reimbursement of service tax, which has been paid by appellant, respondent failed to pay the service tax. Appellant raised a dispute before Arbitrator and award was passed. Claim of appellant was dismissed. Appellant also preferred reference case before Court, same was also dismissed. Learned Senior Counsel appearing for appellant submitted that quotations in R.F.P. was inclusive of service tax. Later on, an addendum was issued, according to which service tax is to be excluded in quotation made in R.F.P. It is submitted that appellant presented his request for proposals (R.F.P.) for contract exclusive of service tax. It is submitted that respondent ought to have reimbursed the service tax to appellant. Learned Senior Counsel appearing for appellant pointed out to various documents of R.F.P., which includes R.F.P. addendum, and pointed out that initially R.F.P. was to be inclusive of service tax and later on, as per addendum, rates which was quoted by appellant was exclusive. Therefore, service tax ought to have been reimbursed. 3. Learned counsel appearing for respondent opposed the appeal on grounds that facts has not been mentioned correctly. Counsel for the respondent relied on two documents, which are part of paper book. He relied on page No. 231 of opening of financial proposal. It is submitted that rates which was quoted by petitioner was Rs. 4,83,85,800/- and it was inclusive of service tax, which can be seen at entry made at Sr. No. 5, Row No. 3. It is further submitted that appellant has signed regarding said quote. No objection was raised that rate quoted was exclusive of service tax. Further, reliance is place on page No. 466 of paper book. Effective part of said letter is quoted as under : "With reference to above cited LOI, we would like to submit here with the BG no. (not legible)/BG/29/79/D/16/02/09 of Saraswat Bank Ltd, Indore, in the desired format of value 10% of contract sum less service tax, amounting to Rs 36,74,653.00 valid for one year i.e. upto 16.02.2010 as per the TOR. (not legible)/BG/29/79/D/16/02/09 of Saraswat Bank Ltd, Indore, in the desired format of value 10% of contract sum less service tax, amounting to Rs 36,74,653.00 valid for one year i.e. upto 16.02.2010 as per the TOR. Pl arrange to prepare the Agreement Documents for the same" It is submitted that respondent may not reimburse service tax again to appellant as same has already been charged by appellant by quoting it in the contract. 4. Heard the counsel for the parties. 5 . Letter at page 466 of the paper book is addressed by appellant company to Shri P.K. Chaturvedi, D.G.M. (Procurement). It is mentioned in said letter that bank guarantee is of Saraswat Bank Ltd. Indore, which is equivalent to 10% of contract value. Bank guarantee was not given in respect of service tax. Had quotation made by appellant was exclusive of service tax, then bank guarantee ought to have been made at the rate of 10% of contract sum and service tax is not required to be deducted. Since service tax has been deducted in the bank guarantee, it shows that contract value which has been quoted by appellant was inclusive of service tax and not exclusive of it. 6 . In view of said circumstances, I do not find it a fit case for interference by this Court. No error could be found in orders passed by Arbitrator as well as by reference Court dismissing the claim of the appellant. 7. Appeal is dismissed.