IMPORTANT POINT
Government officials barred from divulging/producing assessment/return. Bar does not operate on the parties.

Judgment :

H.L. Gokhale J.

Leave Granted.

2. This appeal by Special Leave seeks to challenge the judgment and order dated 20.7.2012 rendered by a Single Judge of Bombay High Court allowing Arbitration Petition No.838 of 2011 filed by the respondent No.1 herein. The said petition sought to invoke the powers of the court under Section 27 of the Arbitration and Conciliation Act, 1996 (herein after referred to as the Act of 1996), which provides for seeking assistance of the court in taking evidence. The said petition had been moved in pursuance of the order dated 16.9.2011 passed by a three member Arbitral Tribunal permitting the respondent No.1 to file such an application. The learned Single Judge allowed the said petition, and thereby directed the appellant to produce the documents as sought by the respondent No.1 before the Arbitral Tribunal. This appeal has been filed by Special Leave to challenge the said judgment and order. The appeal raises the question with respect to the scope of Section 27, and the circumstances in which the Arbitral Tribunal or a party before the Arbitral Tribunal can apply to the court for assistance in taking evidence.

Facts leading to this appeal are this wise:-

3. The respondent No.1 herein is a company which owns certain brands of Indian Made Foreign Liquor (IMFL). The appellant is a company carrying on the business of distilling and bottling of IMFL. The predecessor of the respondent No.1 entered into an agreement with the appellant on 25.3.1997, under which the appellant agreed to manufacture and supply to the respondent No.1, IMFL of such brands and quantity, as would be specified from time to time on the terms and conditions contained therein. Under the said agreement, the contract price at which the IMFL was to be sold by the appellant to the respondent No.1, was exclusive of sales tax and other taxes, and the respondent No.1 was required to bear the same.

4. It appears that sometimes in 2001-2002, certain disputes arose between the parties. A major dispute between them related to the outstanding amount payable at the foot of the running account between them. The respondent No.1 claimed that amongst others, amounts to the tune of Rs.1,22,30,692 and Rs.70,23,107.52 were due and payable to the respondent No.1, whereas the appellant maintained that an amount of Rs.39,37,993 was payable to the appellant. According to the first respondent, the appellant had obtained from the Sales Tax Department set-off/refund on the sales tax paid on packaging material, and such set-off/refund operated to reduce the sales tax liability of the appellant, which was ultimately being borne by the respondent No.1. The respondent No.1 therefore, claimed that it was entitled to the benefit of the said set-off/refund, and accordingly debited the appellant for the amount of set-off/refund.

5. It was the case of the first respondent that although the appellant had accounted for some of these entries in its accounts, it did not account for a major portion of the same. Clause 14 of the agreement between the parties provided that any dispute or difference arising or relating to or connected with the said agreement, was to be referred to arbitration. The above dispute was, therefore, referred to the Arbitration of Hon’ble Mr. Justice D.M. Rege, former Judge of Bombay High Court. However, the Learned Judge resigned as arbitrator, and thereafter the proceedings were continued before another arbitrator Hon’ble Mrs. Justice Sujata Manohar, former Judge of the Supreme Court of India.

6. Thereafter, the advocates of the respondent No.1 gave a notice to the advocate on record of the appellant on 17.3.2007, calling upon them to give inspection and to produce the following documents before the learned Arbitrator:-

(a) All sales tax returns filed by the appellant with the sales tax authorities for the assessment years 1995-1996 to 2001-2002.

(b) All sales tax assessment orders passed with regard to the appellant for the above-ment