$~26 * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Decision : 23.03.2026 + O.M.P. (COMM) 471/2024 STEEL AUTHORITY OF INDIA LMITED .....Petitioner Through: Mr. Shaiwal Srivastava & Ms.

Ghanishtha Mishra, Advs.

versus LARSEN AND TOUBRO LTD. .....Respondent Through: Mr. ER Kumar, Mr. Sameer Parekh, Ms. Swati Bhardwaj &

Ms. Aditi, Advs.

CORAM:

HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR % JUDGEMENT (ORAL)

HARISH VAIDYANATHAN SHANKAR, J.

1. The present Petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996, Act, laying a limited challenge to the Arbitral Award dated 30.06.2023, Impugned Award, insofar as it pertains to the issue of CENVAT/input tax credit.

2. Learned counsel appearing on behalf of the Petitioner submits that the impugned Award is liable to be set aside as the learned Majority Arbitral Tribunal has returned erroneous findings of fact. It is contended that the documents furnished by the Respondent were Signature Not Verified insufficient and did not enable the Petitioner to avail the input tax credit.

3. Per contra, learned counsel appearing for the Respondent submits that the central issue before the learned Arbitral Tribunal, as also before this Court, is whether the Petitioner had taken any steps whatsoever to avail the input tax credit. It is submitted that all requisite documents were duly furnished to the Petitioner and that there was no deficiency on the part of the Respondent.

4. It is further submitted that the Petitioner, on the basis of the documents so furnished, had reimbursed the Respondent towards the amounts paid on account of CENVAT and VAT, which itself demonstrates that the Petitioner had accepted the sufficiency of the documents. He also places reliance upon paragraph nos. 104 and 105 of the Impugned Award to contend that the issue stands concluded in terms of the reasoning adopted therein. The said paragraphs are reproduced hereinbelow:

“104. The Claimant's contention is valid in asserting that the Respondent's inability or failure to utilize the credit does not imply any default on the part of the Claimant. The Claimant argues that their obligations do not extend to ensuring the actual payment of taxes so that the credit for CENVAT, VAT, and VAT on Works Contract is passed on to the Respondent. This argument finds support in a judgment rendered by the Hon'ble Delhi High Court in a case involving the same parties, Steel Authority of India Ltd. (Respondent) vs. Larsen & Toubro Ltd. (Claimant), reported in 2021 SCC Online Del 4065. The relevant part of the judgment reads as under:

“28. It is SAIL's grievance that although it had availed of CENVAT credit in the sum of Rs. 8.36,32, 168/, it could not avail the balance. Accordingly, SAIL clarified that L&T was liable to pay a sum of Rs. 7,60,97,027/- as a shortfall of the minimum guarantee credit on account of CENVAT and MiT on WCT. The Arbitral Tribunal found that in fact, L&T had paid actual taxes amounting to Rs. 16,46,35,688/-and therefore, CENVAT and VAT on WTC was available to SAIL to the aforesaid extent. The fact that SAIL. did not or could not avail of the credit does not in any manner. lead to the Signature Not Verified conclusion that La-2 had defaulted in its obligations. L&T's obligations extended to paying actual taxes so that the credit on account of CENAT, VAT and VAT on Works Contract Credit was passed on to SAIL. Since it was found that L& T had in fact paid taxes amounting to Rs. 16,46,35,688/- and a credit to the aforesaid extent was available to SAIL, L&T had performed its obligations. In view of the above, the Arbitral Tribunal rejected SAIL's counterclaim and rightly so. The contention that the impugned award is perverse or patently erroneous on this ground, is without any merit."

105. Subsequently, in appeal, the aforementioned judgment was upheld by the Hon'ble Division Bench of the Delhi High Court in 2023 SCC Online Del 4457. The relevant paragraph of the judgment passed by the Division Bench is as