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2021 (2) TMI 479 - HC - GSTCompensation on account of inter alia the loss in revenue triggered by reduced toll collections once GST was implemented w.e.f. 1-7-2017, along with future interest - HELD THAT:- It is a general truth that once the Government of India had proposed implementing the GST all over the country, the respondent was aware of its advent, but I find the petitioner’s deduction that the respondent’s awareness of the regime implied that it had knowledge of the date on which it would be implemented, on the date of submission of the bid, entirely unsupported and presumptuous. It is far-fetched to argue that the respondent’s awareness of the existence of a policy would equip it with the ability to predict the date on which the said policy would be implemented. The Learned Arbitrator has rightly held that once the earlier date of 1-4-2017 was postponed by the Government of India, the next date of implementation was not known or could not be speculated by anybody. The petitioner’s assertion that the respondent ought to have refrained from executing the contract agreement if it was unwilling to bear the consequences of the GST regime also proceeds on the presumption that the respondent had the ability to predict the adverse impact of this decision on consumer behaviour with respect to utilization of national highways. This line of argument also fails to account for the fact that by 28-6-2017, the day when the Government of India announced its intention to implement this regime, the parties were already bound contractually owing to the LoA issued by the petitioner on 21-6-2017, which aspect had been elucidated by the Learned Arbitrator - there are no merit in the petitioner’s contention that the respondent’s consent to execute the contract agreement on 30-6-2017 ought to be construed as an acquiescence on its part to bear the consequences of the implementation of GST. Whether the implementation of the GST regime qualified as ‘any change in law which has a material adverse effect on the obligation of the parties hereto.’ as envisaged in the force majeure Clause, i.e. Clause 25(b) of the contract agreement? - HELD THAT:- The respondent observed the then prevailing traffic volume statistics and immediately sent notices to the petitioner on 5-7-2017 and 10-7-2017, which have also been duly noted by the Learned Arbitrator in its award. Thus, the respondent gave the petitioner early notice and regular updates regarding the downward dip of highway traffic and toll collections at that point of time. The respondent even requested the petitioner to carry out its own traffic assessment to verify the respondent’s claims, but the petitioner refused. It is against this backdrop that the petitioner issued the circular dated 16-3-2018, specifically for the benefit of its toll collection contractors, which stipulated that while the implementation of the GST Act constituted a ‘change in law’, but whether this change invited application of the ‘force majeure’ clause in a contract would be determined in the facts of each case by the respondent’s representatives. There are no merit in the petitioner’s contention that the implementation of GST could not be construed as a ‘change in law’ to qualify as a force majeure event in the respondent’s case. In the first place, on 16-3-2018, once the petitioner released a public circular deeming the implementation of GST as a ‘change in law’ qualifying as a force majeure event, I see no reason to deprive the respondent of the benefit of this declaration. Secondly, even if the petitioner wished to rebut the respondent’s contentions on this ground, it was the petitioner’s duty to provide the Learned Arbitrator with a transparent and complete picture of the flow of traffic and toll collections arising therefrom, instead of providing data containing inflated figures owing to exclusion of non-tollable vehicles. A perusal of the findings extracted hereinabove show that the petitioner’s sole caveat in the circular that the toll contractors had been unable to prove their claims, stood resolved when the Learned Arbitrator not only delved into the specifics of the respondent’s claims, but also meticulously combed through the specific project inputs provided by the respondent to conclude that it had suffered material losses in toll revenue owing to the implementation of GST. There is absolutely no ground made out to interfere with the impugned arbitral award passed by the Learned Arbitrator warranting the exercise of the limited jurisdiction of this Court under Section 34 of the Act - Petition dismissed.
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