(1.) PRESENT petition has been filed by the petitioner herein (lessor) under sec.11(6) of the Arbitration and Conciliation Act, 1996 (?Sthe Act?? for short) to appoint Mr.Y.B. Mahadevia as the sole arbitrator or sole arbitrator of his choice for arbitration of the disputes between the petitioner and the respondent Company (lessee) with respect to the liability of the respondent Company to pay the service tax in respect of the premises taken on lease by the respondent Company from the petitioner by the Lease Deed dtd.5/8/2005 for the period from June, 2007 to October, 2007 due from the respondent Company already credited to Government Account by the petitioner.
(2.) LEASE Deed dtd.5/8/1985 has been executed between the petitioner and the respondent Company leasing out to the respondent Company building premises of the Monalisa Plaza situated at Final Plot No.326 Part -II, Race Course Circle, Vadodara together with car parking space, at the monthly rent of Rs.7,01,250=00. That as per the terms of the Lease Deed, lessee shall be liable to pay all the rates, taxes, cesses etc. (Clause -10). It appears that from 1/6/2007, financial year 2007 has brought service of the renting immovable property for furtherance of business or commerce under the net of service tax. It is the case on behalf of the petitioner lessor that as per Clause 10 of the Lease Agreement, the lessee shall be liable to pay all the rates, taxes, cesses, charges and expenses to the Vadodara Municipal Corporation and/or any other public authority, therefore, liability to pay service tax is also upon the lessee. It is the case on behalf of the petitioner lessor that the petitioner lessor has paid service tax to the tune of Rs.4,33,375, however, the respondent Company ? lessee has denied its liability to pay service tax with respect of the demised premises on the plea that the terms of the Lease Deed does not provide for service tax to be born by the respondent Company. Therefore, according to the petitioner lessor, a dispute has arisen between the petitioner lessor and the respondent lessee. It is the case on behalf of the petitioner that the petitioner has written to the respondent company on 22/24 -8 -2007 for arbitration for the said dispute by invoking arbitration Clause -19 contained in Lease Deed dtd.5/8/2005 and the name of Mr.Y.V. Mahadevia as its arbitrator for conducting arbitration proceedings. It is the case on behalf of the petitioner that though the respondent Company has received the said communication on 4/9/2007, the respondent Company has failed to appoint its arbitrator and has thus failed to act as required under the Arbitration Clause -19 contained in the said Lease Deed executed between the petitioner and the respondent Company on 5/8/2005 and hence the petitioner has preferred present Arbitration Petition under Sec.11(6) of the Act.
(3.) MR .Shalin Mehta, learned advocate appearing on behalf of the petitioner has submitted that in view of the specific Clause No.10 of the Lease Agreement, liability to pay all the taxes, cesses etc. is upon the lessee and therefore, the respondent company is liable to pay service tax imposed for the year 2007 w.e.f. 1/6/2007. It is submitted that the respondent Company ? lessee has denied its liability to pay service tax and because of that, dispute has arisen and the said dispute is required to be resolved by the arbitrator as per Clause -19 of the Lease Deed.