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W.P.(C) No.5056/2018

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IN THE HIGH COURT OF DELHI AT NEW DELHI

%

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W.P.(C) 5056/2018 & CM No.54995/2022

GAIL (INDIA) LIMITED

..... Petitioner

Through:

Mr. Vikas Mehta & Mr. Apoorv

Khatar, Advs.

Versus

DIRECTORATE GENERAL OF GST

INTELLIGENCE & ANR.

..... Respondents

Through:

Mr. Satish Aggarwala & Mr. Gagan

Vaswani, Advs. for R-1.

Mr. Ankit Parhar, Adv. for R-2.

CORAM:

HON'BLE MR. JUSTICE VIBHU BAKHRU

HON'BLE MR. JUSTICE AMIT MAHAJAN

VIBHU BAKHRU, J.

1.

The petitioner – GAIL (India) Ltd. (hereafter ‘GAIL’) – is a

Central Public Sector Undertaking engaged in the business of

transportation of petroleum and natural gas products.

2.

The petitioner has filed the present petition impugning the order

dated 08.03.2018 (hereafter ‘theimpugned order’) issued by

respondent no.1 under Section 87(b) of Chapter-V of the Finance Act,

1994 (hereafter the ‘Act’) read with Section 174(2)(e) of the Central

Goods & Services Tax Act, 2017 (hereafter the ‘CGST Act’) calling

upon GAIL to pay a sum of ₹13,13,07,485/- which, respondent no.1

believes, is owed by GAIL to respondent no.2.

Digitally Signed

By:Dushyant Rawal

Signing Date:10.04.2023

Signature Not Verified

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W.P.(C) No.5056/2018

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3.

GAIL’s case as set out in the present petition is that it has not

admitted that any amount is due and payable to respondent no.2;

therefore, there is no question of GAIL making any payment to

respondent no.1 on account of any amount due to respondent no.2.

Consequently, GAIL cannot be treated as an ‘assessee in default’ as

stated in the impugned order dated 08.03.2018.

4.

Briefly stated, the relevant facts necessary to address the

controversy in the present petition are as under:

4.1

GAIL invited tenders on 12.01.2011 & 24.01.2011 for laying of

pipelines for the spur lines to Bilwara and Chittorgarh as well as

augmentation of existing Vijaipur-Kota pipeline.

4.2

Respondent no.2, is engaged in the business of executing such

works and submitted its bid pursuant to GAIL’s invitation to tender for

the works. Respondent no.2’s bid was accepted and the contract for

execution of the works was awarded to it.

4.3

GAIL claims that thereafter, sometime in August, 2013, it found

that respondent no.2 had submitted certain fabricated documents for

securing the contract for executing the works in question.

4.4

In view of the above, on 17.01.2014, GAIL issued a letter

terminating the contract with respondent no.2. GAIL also blacklisted

respondent no.2 from entering into any dealings with GAIL for a period

of ten years.

4.5

The aforesaid action of GAIL led to respondent no.2 raising a

dispute and seeking reference of the disputes to arbitration. Respondent

Digitally Signed

By:Dushyant Rawal

Signing Date:10.04.2023

Signature Not Verified

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W.P.(C) No.5056/2018

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no.2 filed an application (being OMP No.83/2014) before this Court

seeking interim measures of protection under Section 9 of the

Arbitration & Conciliation Act, 1996 (hereafter the ‘A&C Act’).

Respondent no.2 sought and was granted an ad interim order restraining

GAIL from encashing the bank guarantees amounting to ₹7 crores.

Subsequently, the application under Section 9 of the A&C Act was

directed to be considered by the Arbitral Tribunal as an application

under Section 17 of the A&C Act.

4.6

In the meanwhile, respondent no.1 had also initiated proceedings

in respect of statutory dues owed by respondent no.2.

4.7

On 26.10.2017, respondent no.1 issued summons to GAIL

requiring it to submit information in respect of respondent no.2. It is

relevant to note that at the relevant time, the respondents