Participation In Arbitration Does Not Waive Government's Right To Challenge Limitation: J&K High Court

On 6 October, the High Court of Jammu & Kashmir and Ladakh held that the government does not waive its right to challenge stale claims merely by participating in arbitration or failing to raise limitation during proceedings for appointment of an arbitrator. A Division Bench comprising Justices Rajnesh Oswal and Rahul Bharti dismissed a contractor's appeal against the setting aside of most of an arbitral award concerning work on the Wangat Weir at the Upper Sindh Hydel Project-II...

Education Cess Refunds Settled Under Earlier Law Cannot Be Recovered Due To Later Change In Law: J&K&L High Court

The High Court of Jammu & Kashmir and Ladakh has held that refunds of Education Cess and Higher Education Cess granted under the law prevailing at the time cannot be recovered merely because the Supreme Court later overruled that position in Unicorn Industries v. Union of India.Justice Sanjeev Kumar and Justice Shahzad Azeem observed that once a subsequent judgment overrules an earlier decision on a point of law, the earlier judgment cannot be reopened or reviewed on that basis. “Once there...

J&K High Court Stays ₹3.88 Cr. GST Show Cause Notice Against Uflex Ltd. For Lack Of Fraud Allegations

On 16 September, the Jammu & Kashmir and Ladakh High Court stayed a show cause notice issued under Section 74(1) of the Jammu and Kashmir Goods and Services Tax Act, 2017, where the petitioner challenged the invocation of the provision in the absence of foundational facts of fraud, wilful misstatement or suppression of facts with intent to evade tax. A Division Bench of Justices Sanjeev Kumar and Shahzad Azeem issued notice to the respondents and stayed the effect and operation of the...

J&K And Ladakh High Court Upholds Construction Workers Cess Act For Erstwhile J&K

The High Court of Jammu & Kashmir and Ladakh has upheld the levy of cess on the cost of construction under the Building and Other Construction Workers Welfare Cess Act, 1996, holding that the Cess Act is an extension and integral part of the law governing the employment and welfare of construction workers.A Division Bench of Acting Chief Justice Sanjeev Kumar and Justice Mohd Yousuf Wani held,“The Cess Act must be considered and treated to be an extension and integral part of the BOCW Act....

Jammu & Kashmir and Ladakh High Court Quashes GST Penalty Proceedings Over One-Day Delay In Notice

The High Court of Jammu & Kashmir and Ladakh has held that the seven-day timeline under Section 129(3) of the Central Goods and Services Tax Act, 2017 for issuing a notice after detention and seizure of goods is mandatory. The court set aside the orders in the case after finding that the notice was issued a day beyond the prescribed period.“There was a delay of one day in issuing the notice, which vitiates the entire proceedings,” a Division Bench of Acting Chief Justice Sanjeev Kumar and...

Arbitrator Can Award Escalation For Employer-Caused Delay Without Contractual Clause: J&K High Court

On 29 August, the High Court of Jammu & Kashmir and Ladakh held that an Arbitrator can award escalation for delay attributable to the employer even when the contract does not contain a 'Price Escalation Clause'. Justice Shahzad Azeem upheld an arbitral award of Rs. 21.19 lakh in favour of a contractor, finding that the Arbitrator had based the escalation award on the Department's default in supplying construction material and supported the finding with evidence. The Bench held: “The...

Section 269SS Income Tax Act Breach Does Not Bar Section 138 NI Act Case: J&K High Court

The High Court of Jammu & Kashmir and Ladakh on 18 August held that violation of Section 269SS of the Income Tax Act does not render a transaction unenforceable under Section 138 of the Negotiable Instruments Act (NI Act), and attracts only the penalty prescribed under the Income Tax Act. Section 269SS of the Income Tax Act restricts the acceptance of certain loans, deposits and specified sums in cash. A Bench of Justice Shahzad Azeem dismissed two petitions filed by Manzoor Ahmad Khan...

J&K And Ladakh High Court Holds SIDCO MD Ineligible To Act As Arbitrator In Contract Dispute With UT

The High Court of Jammu & Kashmir and Ladakh on 21 August held that the Managing Director of J&K State Industrial Development Corporation (SIDCO) was ineligible to act as an arbitrator in a dispute between Abraq Infrastructures LLP and the Union Territory, as he was an employee of one of the respondents. Acting Chief Justice Sanjeev Kumar allowed Abraq Infrastructures LLP's petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, and appointed a Retired District and...

Exercise Of Writ Jurisdiction Against Interlocutory Arbitral Orders Only In Exceptional Cases: J&K And Ladakh High Court

The High Court of Jammu & Kashmir and Ladakh has ruled that its writ jurisdiction should be exercised with exceptional restraint against interlocutory orders passed by an Arbitrator during ongoing proceedings.Explaining the limits on judicial intervention, Justice Sanjay Parihar observed, “The jurisdiction of this Court under Articles 226 and 227 undoubtedly survives, but its exercise against interlocutory arbitral orders is subject to exceptional restraint. Mere error of fact or law, or the...

J&K And Ladakh HC Holds Past Arbitration No Bar In Refund Claim, Directs SKUAST-J To Release Deposit

On 3 August, the Jammu & Kashmir and Ladakh High Court held that a contractor's claim for refund of earnest money and performance security cannot be rejected merely because it was not raised in earlier arbitration proceedings over delayed payments. A Bench of Justice Sanjay Parihar directed Sher-e-Kashmir University of Agricultural Sciences and Technology, Jammu to refund Rs. 29 lakh deposited by Construction Engineer for a boys' hostel project and held that the refund claim was not barred...

Jammu & Kashmir and Ladakh High Court Dismisses MSME Supplier's Writ, Cites MSMED Act Remedy

The Jammu & Kashmir and Ladakh High Court has ruled that it would ordinarily not exercise its writ jurisdiction under Article 226 where an MSME supplier has an equally efficacious statutory remedy under the Micro, Small, and Medium Enterprises Development Act, 2006 (MSMED Act). Dismissing a petition filed by a registered micro enterprise seeking recovery of alleged outstanding dues, the court held that no exceptional circumstances had been made out to justify bypassing the statutory...

GST Penalty Order Passed Beyond 7 Days Of Show Cause Notice Is Invalid: Jammu & Kashmir and Ladakh High Court

The Jammu & Kashmir and Ladakh High court has held that the seven-day timeline prescribed under Section 129(3) of the Jammu & Kashmir Goods and Services Tax Act, 2017 for passing a penalty order is mandatory. It ruled that a penalty order passed even a day beyond the statutory period cannot be sustained. A Division Bench of Acting Chief Justice Sanjeev Kumar and Justice Mohd Yousuf Wani observed that where the legislature has used the word "shall" while prescribing timelines for the...