Karnataka High Court
Bharath Chemical Industries vs The State Of Karnataka on 1 December, 2022
Author: S.R.Krishna Kumar
Bench: S.R.Krishna Kumar
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 1ST DAY OF DECEMBER, 2022
BEFORE
THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR
WRIT PETITION No.21648/2022 (T-RES)
BETWEEN:
BHARATH CHEMICAL INDUSTRIES
A PARTNERSHIP FIRM
REPRESENTED BY ITS MANAGING PARTNER,
C.N. RAJU, PLOT NO. 433,
KIADB INDUSTRIAL GROWTH CENTER,
H. N. PURA ROAD,
HASSAN-573 201.
... PETITIONER
(BY SRI ABHISEK PATIL, ADVOCATE)
AND:
1. THE STATE OF KARNATAKA
REPRESENTED BY
COMMISSIONER OF COMMERCIAL TAXES,
OFFICE OF COMMERCIAL TAXES-1,
1ST FLOOR, GANDHINAGAR,
BENGALURU-560 009
2. ASSISTANT COMMISSIONER OF
COMMERCIAL TAXES
LOCAL GOODS AND SERVICE TAX,
OFFICE OF ASSISTANT COMMISSIONER
OF COMMERCIAL TAXES,
LOCAL GOODS AND SERVICE TAX 242,
SHARADA SAMUDAYA BHAVANA,
SHANKAR MUTT ROAD,
HASSAN-573 201
3. K.JAYPRAKASH
S/O KESHAVAN NAYAR
AGED ABOUT 51 YEARS
R/AT FLAT NO.5, JAYA BUILDING
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LAKSHMANA NAGAR, ASRAMAM POST
QUILON, KERALA-691 002
ALSO AT C/O VINAYA
SIRI, II MAIN, II CROSS
JAYANAGARA II STAGE
VIDYANAGARA POST
HASSAN
PARTNER- BHARATH CHEMICAL INDUSTRIES
HAVING ITS OFFICE IN
PLOT NO.433, KIADB INDUSTRIAL
GROWTH CENTER, H.N.PURA ROAD
HASSAN-573 201
... RESPONDENTS
(BY SRI.HEMA KUMAR, AGA FOR R1 AND R2
SRI.K.N.PHANEENDRA, SR. COUNSEL FOR
SRI.SRIKANTH PATIL K., ADVOCATE FOR R3)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 OF THE
CONSTITUTION OF INDIA, PRAYING TO QUASH THE ENDORSEMENT
DTD: 10.08.2022 BEARING NO.ACCT/LGSTO 242/HSN.60/2022-23 AT
ANNEXURE-T ISSUED BY R2 AND ETC.
THIS PETITION COMING ON FOR ORDERS THIS DAY, THE
COURT MADE THE FOLLOWING:
ORDER
1. In this petition, the petitioner - Partnership Firm seeks for quashing of impugned endorsement dated 10.08.2022 at Annexure-T issued by respondent No.2 and other reliefs.
2. Heard Sri Abhishek Patil, learned counsel for the petitioner, learned Additional Government Advocate for respondents 1 and 2 and Sri K.N.Phaneendra, learned Senior Counsel appearing for respondent No.3 and perused the material on record. 3
3. The material on record discloses that the petitioner - firm originally comprised of three partners namely Sri C.N.Raju, who has signed and verified the present writ petition, Sri P.S.Biju and Sri K.Jayaprakash, respondent No.3 herein.
4. Respondent No.3 - Sri K.Jayaprakash instituted a suit in O.S. No.518/2021 on the file of the VI Additional Civil Judge and JMFC, Hassan seeking various reliefs. In the said suit, Sri C.N.Raju and Sri P.S.Biju, who were arrayed as defendants filed application I.A.No.6 under Sections 7 and 8 of the Arbitration and Conciliation Act, 1996 seeking reference of the dispute to arbitration. Though the said application was opposed by respondent No.3 herein, the Trial Court proceeded to pass an order on 05.04.2022 allowing the said application and referring the matter to arbitration.
5. The aforesaid order dated 05.04.2022 has attained finality and the same has become conclusive and binding upon respondent No.3 herein, who has not challenged the same so far. It is, therefore, clear that inter se dispute between the partners 4 namely C.N.Raju, P.S.Biju and K.Jayaprakash has been referred for resolution to arbitration.
6. Learned counsel for the petitioner and the learned Senior counsel appearing for respondent No.3 jointly submit that pursuant to the aforesaid order dated 05.04.2022, the parties have not been able to arrive at a consensus with regard to the name of the Arbitrator, who will enter upon reference. However, they jointly submit before this Court that the dispute between the parties may be referred for arbitration to the retired District Judge Sri V.V.Angadi to be conducted at the Arbitration and Conciliation Centre, Bengaluru. The joint submission is placed on record.
7. 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 5 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, I deem it 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.
8. In the facts and circumstances of the case and in view of the joint submission made by both sides, I pass the following:
ORDER
(i) The dispute between the parties pursuant to the order dated 05.04.2022 passed on I.A.No.6 in O.S.No.518/2021 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 6 Judge, who shall conduct the proceedings at the Arbitration and Conciliation Centre (Domestic & International), Khanija Bhavan, Bengaluru.
(ii) 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, respondent No.3 is directed to file GST returns before the GST authorities and do all other acts, deeds and things in this regard including generating E-way bill, for which necessary papers shall be provided by Sri C.N.Raju and Sri P.S.Biju to respondent No.3 -
K.Jayaprakash.
(iii) It is made clear that filing of GST returns, generating E-way bill, etc., shall not be construed as creating any right or interest in favour of respondent No.3 affecting the rights of C.N.Raju and Sri P.S.Biju in any manner whatsoever.
(iv) The parties are directed to co-operate with each other for the purpose of filing GST returns, generating E-way bill and to do all other acts, deeds and things in this regard.
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(v) All claims and rival contentions between the parties in the present petition before this Court are kept open and no opinion is expressed on the same.
(vi) Registry is directed to communicate this order to the Arbitration & Conciliation Centre as well as to the aforesaid learned sole Arbitrator. Subject to the above directions, the writ petition is disposed off.
SD/-
JUDGE PKS