JUDGMENT

H.L. Gokhale, J.

1. Leave granted.

2. This appeal is directed against the judgment and order dated 25.2.2008 rendered by a Division Bench of the Bombay High Court in Appeal No. 188/2006 confirming the decision of a single Judge of that court dated 4.7.2005 in Arbitration Petition No. 364/2004, whereby the High Court has set aside the award dated 25.5.2004 passed by a sole arbitrator which award had dismissed the Claim Petition of the Respondent against the Appellant herein.

3. The questions involved in this appeal are two-fold, (i) firstly, whether under the relevant Clause 9.3 of the terms and conditions of the contract between the parties, the Appellant was right in deducting the service tax from the bills of the Respondent and, (ii) secondly, whether the interpretation of this clause and the consequent award rendered by the arbitrator was against the terms of the contract and therefore illegal as held by the High Court, or whether the view taken by the arbitrator was a possible, if not a plausible view.

The contract and the relevant clause:

4. The Appellant - a Govt. of India undertaking is engaged in the manufacture of steel products and pig-iron for sale in the domestic and