In a recent ruling, the Delhi High Court bench of Justice Vibhu Bakhru and Justice Amit Mahajan directed the Directorate General of Goods and Services Tax Intelligence (DGGI) not to force GAIL to pay any amount which is not due.
Further stated that there is no material to show that any such amount is due and payable by GAIL.
The petitioner , GAIL (India) Ltd. (GAIL) is a Central Public Sector Undertaking engaged in the business of transportation of petroleum and natural gas products.
The fact is that 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 the existing Vijaipur-Kota pipeline.
The 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. The bid was accepted and the contract for execution of the works was awarded to it.
GAIL claimed that in August, 2013, it was found that the respondent no.2 had submitted certain fabricated documents for securing the contract for executing the works in question.
In view of the above, on 17.01.2014, GAIL issued a letter terminating the contract with the contractor. Also, blacklisted the contractor from entering into any dealings with GAIL for a period of ten years.
Based on the information, as submitted by GAIL, the DGGI issued the impugned order requiring GAIL to pay an amount of ₹13,13,07,485.
In order to resolve their disagreements, the second respondent and the petitioner GAIL entered into an agreement.
As part of the settlement, GAIL has agreed to pay the second respondent a sum of money totaling approximately 6.54 crores, subject to respondent no.2 submitting an invoice totaling approximately 1.01 crores.
In addition, GAIL was also required to handover Performance Bank Guarantees (thirty four in members) amounting to ₹4.25 crores.
The bench observed that the contested order directing GAIL to pay a sum of ₹13,13,07,485 is not sustainable. Thus, set aside the impugned order issued by the DGGI.
Additionally, the bench clarified that the DGGI is not precluded from taking such steps as may be available in law for securing the interests of the Revenue.
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