BIRLA JUTE AND INDUSTRIES LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) JUDGMENT J. (Oral)-

(2.) THIS is a petition under Section 20 of the Arbitration Act by Birla Jute & Industries Ltd. seeking direction to the respondent to file the arbitration agreement in court and for reference of the disputes for arbitration. The case of the petitioner is that respondent No. 1 through respondent No. 2 entered into a rate contract with the petitioner for supply of cement to all the Government and quasi public bodies against supply orders placed by them from time to time. Clause 8 of the said contract provides that sales tax if legally leviable, would be paid in addition to the price mentioned in clause 4 of the rate contract. The contract also contains arbitration clause which provides that any dispute or differences arising between the parties shall be referred to the sole arbitration of an officer of the Ministry of Law, appointed to be the arbitrator by the Director General of Supplies and Disposals. It is the case of the petitioner that the rate contract was renewed from time to time on behalf of the respondent. The petitioner was informed by respondent. No. 2 by letter dated 2-4-70 that the question whether sales tax was payable on the element of freight was under examination and requested the petitioner not to claim sales tax on the freight with effect from 1-12-1969. It was agreed to by the petitioner. The petitioner despatched cement to the purchasers in terms of the rate contract. Clause 8 in respect of the sales tax was amended by the respondent in April, 1973. On the basis of the aforesaid amendment the petitioner continued to supply various quantities of cement to Government organisations.