We all know arbitration is one of the alternate dispute resolution mechanisms widely used. Whenever there is a dispute between the parties to the contract and the contract provides for arbitration, the dispute is to be resolved by opting to arbitration. Both the parties to the contract appoint an arbitrator and thereafter an arbitration tribunal gets constituted. The arbitration tribunal hears both the parties and passes an award. The award is equivalent to a decree of court unless it is stayed. The general trend is that the courts do not involve much in the arbitration matters respecting the party autonomy. Only in rarest occasions, the courts interfere with the awards. In other words, the award of the arbitration tribunal is almost final and binding on the parties.

With the above brief background on arbitration, we shall proceed in this article to deal with various issues that arise from the arbitration award that have implications under the GST laws. Needless to say, that the spectrum of arbitration is very wide, and it is not possible to cover analysis on each aspect. Hence in this article, we restrict ourselves to analysis of those major issues which we have handled.

Read more: GST Implications on Issues arising from Arbitration Awards

In Part I, the concept of recognized provident fund (‘RPF’) has been discussed. In this part, concepts of approved superannuation fund (‘ASF’) and gratuity fund will be discussed.

Approved Superannuation Fund [ASF]:

The term ASF is defined under section 2(6) to mean a superannuation fund which is recognized by the PCCIT/CCIT/PCIT/CIT in accordance with the rules contained in Part B of Fourth Schedule to the ITA[1]. The procedure for obtaining registration has been provided in the rules contained in Part B of Fourth Schedule.

Read more: All about Recognized Provident Fund, Approved Superannuation Fund and Gratuity Fund - Part II

1. High Court of Karnataka in the case of M/s. Wipro Limited[1] - Benefit of Circular 183[2] should be extended in case of bonafide error (quoting of wrong GSTIN):                                                                                                            

In this case, petitioner has preferred the writ petition to allow him to access the GST portal to rectify the error in Form GSTR-1 that has been uploaded during FY 2017-18, FY 2018-19 and FY 2019-20, so as to enable the recipient to take the credit of the tax paid by the petitioner.

The petitioner has invited attention of the Court to the circular that has been issued to prescribe the procedure for allowing the recipient to take credit, where there were bonafide errors which got crept in while filing the returns for the period FY 2017-18 and FY 2018-19.

Read more: Summary of GST Decisions

1. Madras High Court in BNY Mellon Technology Private Limited[1] - The time limit prescribed for TPO to complete assessment before 60 days prior to the last date to complete assessment under section 153 is mandatory in nature and the word ‘prior to’ should be interpreted differently from the word ‘to’:

The facts in the case were that the last date for completion of assessment in the said case is 31.12.19 after extending the time limit by 12 months on account of referring the case to TPO. Accordingly, as per section 92CA(3A), the TPO had to pass the order before 60 days prior to the last date on which the time limit for assessment expires. TPO actually passed the order in 01.11.19. To determine the validity of the TPO’s order, the question has arisen whether the last date on which the time limit for assessment expires is 31.12.19 or 01.01.20 thereby deciding whether last date for passing order by TPO is 01.11.19 or 31.10.19.

The revenue has drawn attention to the General Clauses Act, 1897 and contended that where the word ‘to’ is used in an act for determining the time limit, it shall be interpreted as ‘up to that date’ and such date shall be included. Therefore ‘the date before 60 days prior to the last date of assessment ‘would mean 60 days calculated by including 31.12.19 also and hence the last date for TPO’s order would be 01.11.19 by leaving the AO a period of 60 days to complete his assessment.

Read more: Summary of IT Decisions