The Karnataka High Court annulled an arbitral award due to the tribunal's failure to consider vital GST invoices, demonstrating the legal imperative for arbitral bodies to account for all evidence in tax-related disputes.
Karnataka HC Sets Aside Arbitral Award for Ignoring GST Invoices
The Karnataka High Court has set aside an arbitral award concerning a ₹43 crore project by the National Centre for Biological Sciences (NCBS) on the grounds that the tribunal committed a patent illegality. The court found that the tribunal based its decision solely on a final settlement bill while neglecting significant evidence, including running account invoices that explicitly documented an 18% Goods and Services Tax (GST).
This ruling underscores the importance of comprehensive evidence review in arbitration, particularly in tax-related disputes. The court highlighted that overlooking such corroborating invoices vitiates the validity of the award and necessitates recalculation of the tax liabilities involved.
The court's decision is a reminder that arbitral tribunals must ensure they fully consider all available documentation to maintain the integrity of their awards. This case sets a precedent that could have wide-ranging implications for future arbitration proceedings, particularly in contractual disputes involving taxation.
Citations
- NCBS Project (2026) KHC 43
