Calcutta High Court: Tax Reimbursement Claim Not Maintainable Under Section 9 Kolkata, Nov 29 (KNN) The Calcutta High Court has held that a partner cannot seek reimbursement of municipal tax payments through a post-award petition under Section 9 of the Arbitration and Conciliation Act, 1996. It said such claims amount to substantive monetary disputes that must be adjudicated under Section 34.Justice Gaurang Kanth dismissed a petition filed by partners of Chander Niwas seeking directions to recover the balance amount of Kolkata Municipal Corporation (KMC) tax from other partners. The petitioners had paid Rs 47.50 lakh under a limited-period waiver scheme while the arbitral award was already under challenge. The court-appointed Receiver reimbursed Rs 20 lakh, after which the petitioners approached the court under Section 9 for the remaining amount.The respondents argued that the tax liability arose after the award and was never part of the arbitration, and therefore required fresh adjudication. Agreeing with this view, the court clarified that Section 9 is meant only for interim protection in aid of the arbitral process and cannot be used to determine new financial liabilities or enforce substantive rights.The Court noted that apportioning tax liability among partners involves factual examination and accounting scrutiny, which can only be addressed in the Section 34 proceedings where the award is already under challenge.Holding that the reimbursement claim was a fresh dispute outside the scope of Section 9, the Court dismissed the petition.(KNN Bureau)
