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METALS AND MINERALS TRADING CORPORATION OF INDIA LIMITED (MMTC) AND ANR. Versus K.S. OILS LIMITED

2018 (2) TMI 846 - DELHI HIGH COURT

Whether the petitioner was justified in holding the amount payable to the respondent after clearing its dues in apprehension of any tax liability that may have any reason against the company? - Held that: - the witness of the respondent had admitted that the tax liability had arisen because of a typographical error of the staff of the respondent in documents relating to the transaction and hence for fault of the respondent, the petitioners have to write various letters to release such amoun .....

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espondent : Mr.Varun Mishra, Advocate CORAM: HON'BLE MR. JUSTICE YOGESH KHANNA YOGESH KHANNA, J. 1. This petition is under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred as the Act ) for setting aside impugned award dated 16.10.2017 passed by the arbitral tribunal. The brief facts of the case are: a) On 14.09.2007 an agreement was executed between the petitioner and the respondent for trading/procurement /sale of mustard and soya seeds and a Subsequent Agreeme .....

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he petitioner for recovery of VAT tax; c) On 03.01.2012 the petitioner were constrained to invoke the Bank Guarantee for recovery of outstanding amount and the balance amount of ₹ 1.88 Crores was withheld on account of VAT Tax liability imposed upon the Petitioners in relation to transactions between the petitioners and the respondent. The VAT Tax orders issued against the petitioners was assailed by the petitioners before the Deputy Commissioner (Appeals) II, Commercial Taxes, Jaipur and .....

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t there were two transactions and also held the Tax Authority misconstrue the concept of proforma invoices; e) the respondent issued a legal notice dated 09.02.2016 to the petitioners seeking refund of ₹ 2.59 Crores within 15 days along with interest at the rate of 12% per annum. The petitioners on 14.04.2016 issued a reply to the notice dated 09.02.2016 wherein it was categorically stated that the petitioners had rightly withheld a sum of ₹ 1.89 Crores on account of erroneous tax li .....

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3.2015 was assailed by the Tax Department before the High Court of Rajasthan in S.B. Sales Tax (VAT) in Revision Petitions No.20/2015 and 21/2015. By Order dated 01.09.2016, High Court of Rajasthan dismissed the aforesaid petitions upholding the order passed by Dy. Commissioner Appeals and the order passed by Rajasthan Tax Board; h) on 06.04.2017 the arbitral tribunal was constituted and the respondent submitted its statement of claim against the petitioners. The arbitral tribunal by its order d .....

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w clauses of the agreement which would throw light on the subject. The relevant clauses are: 21. KSOL shall fully indemnify MMTC and keep MMTC fully indemnified and harmless against any losses or damages whatsoever including liabilities arising out of failure to comply with any or all of the conditions/clauses of future trading on NCDEX. KSOL shall also keep MMTC indemnified against all such payment/ liabilities if claimed by any authority/ies, even at a later date against the transaction made u .....

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ms and conditions of this agreement. KSOL shall also indemnify MMTC from any/all claims under the contract as well as agro commodities trading in NCDEX. 27. Any statutory charges and applicable duties/levies/taxes such as VAT/CST/ST/ Mandi Tax etc. at any point of time for transaction under this agreement shall be to the account of KSOL. Further all expenses like insurance, storage charges, NCDEX charges and other out of pocket expenses, if any, shall be to the account of KSOL. 31. If any litiga .....

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sing out of the actual transaction(s) taking place between the parties hereto under this agreement and/or any modified/amended undertaking will be to the account of KSOL only. 38. The termination of this Agreement shall not affect any rights or obligations of either party which have accrued prior to the termination or which may arise out of or in connection with trades/transaction entered into or acts done or omitted prior to the termination, but which may result in future dues/obligations payab .....

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shed the same to recover its outstanding dues against the Claimant in the running account. 9. The Claimant thereafter vide its various letters dated 06.01.2012, 16.07.2012, 17.08.2012, 31.08.2012, 13.12.2012, 31.01.2013, 21.08.2014, 03.02.2015, 24.03.2015 requested the Respondent to refund the excess amount to the bank account of the Claimant withheld by the Respondent The Claimant even requested the Hon'ble Minister of Commerce, Ministry of Commerce and Industry, to intervene in the said ma .....

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09.2016 of High Court of Adjudicature of Rajasthan at Jaipur in Revision Petition No.2050/2015 and the relevant paras are reproduced as under: 8. The Rajasthan Tax Board as well as the Dy. commissioner (A) has come to a finding that at times this happen because the transactions are though (NCDEX) and there may be a possibility of inadvertent or clerical error and once the assessee was able to show from acceptable evidence than result is obvious and rightly reached by the Dy.Commissioner (A) and .....

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