The Supreme Court on September 12, 2022 in the matter of Shree Enterprise Coal Sales Pvt Ltd. v. Union of India held that the relief related to tax concessions are not of an arbitrable nature.

In the instant matter an appeal was filed against the judgment of a Division Bench of the High Court of Allahabad in a Writ Tax petition, dismissing the petition on the ground that the terms of e-auction in a dispute are Arbitrable. In the present case Shree Enterprise Coal Sales Pvt. Ltd. (“Appellant”), a company involved in trading of coal, purchased coal from Northern Coal Fields Limited (“Respondent”) through e-auction and the Appellant took certain consignments through the railways, charged at a concessional rate of tax at two percent by the Respondent. Pursuant to this the Respondent did not grant the benefit of Form C while charging tax at the rate of four percent. Subsequently, the Appellant filed a writ petition in the High Court.

The Supreme Court overturned the High Court’s judgement and held that the High Court has erred in holding that the terms of e-auction in a dispute are arbitrable. It was held by the court that although, a contractual dispute would be amenable to being resolved by arbitration but in the present case, the relief related to tax concessions was not of an arbitrable nature as the appellant was not asserting a contractual claim in pursuance of the e-auction.Thus, the Court allowed the appeal and remanded the case back to the High Court for further consideration on the merits.