Facts of the Case

This is a civil suit between two private companies, Pushpak Commercial Company Limited (plaintiff) and Tanagers Developer Private Limited (defendant), and does not involve any GST dispute. Pursuant to an earlier order dated 27th June 2023, the defendant produced a demand draft of Rs. 21,44,292/- in Court, this figure having been arrived at by deducting Tax Deducted at Source (TDS) at 10% from Rs. 20,00,000/-, adding Rs. 3,60,000/- towards 18% Goods and Services Tax, and then deducting a further sum of Rs. 15,708/-.

The particulars of this calculation had been agreed between the parties and were reflected in a Terms of Settlement dated 11th August 2023, signed by the parties and their respective advocates.

Issues Involved

  1. Whether the suit could be decreed in terms of the settlement reached between the parties, incorporating the agreed payment calculation.

Petitioner's (Plaintiff's) Arguments

  • The plaintiff accepted the demand draft as calculated and agreed under the Terms of Settlement, and sought that the suit be decreed accordingly.

Respondent's (Defendant's) Arguments

  • The defendant complied with the earlier order by producing the demand draft in Court, calculated per the agreed formula, in satisfaction of its obligations under the settlement.

Court Order / Findings

  • The Court noted that the demand draft was made over to the plaintiff's advocate, and the plaintiff was entitled to encash it and appropriate the proceeds.
  • Finding the Terms of Settlement to be a lawful agreement, the Court took it on record and decreed the suit in terms of that settlement, directing that the decree be expeditiously drawn up incorporating the settlement terms.
  • Any pending applications in the suit were disposed of without further orders, the suit itself having been settled.

Important Clarification

The 18% GST figure here is simply one line item in a privately agreed payment calculation between two companies settling a civil dispute — the Court did not examine, interpret, or rule on any GST provision. This is a consent decree, not a tax judgment, and should not be relied upon for any GST-related proposition.

Sections Involved

  • Order XXIII, Rule 3 of the Code of Civil Procedure, 1908 (decree in terms of a lawful compromise/settlement)

Decision – In Favour of

Disposed of by consent — the suit was decreed in terms of the settlement agreed between the parties, with no contested GST issue involved.

Case Details

Court: High Court at Calcutta, Ordinary Original Civil Jurisdiction
Case No.: CS 74 of 2022 (with IA GA 1 of 2022 and IA GA 3 of 2022)
Coram: Hon'ble Justice Arindam Mukherjee
Date of Order: 16.08.2023

Link to Download the Order

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