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TMI Blog2022 (4) TMI 1250X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Board, Ajmer, rejecting the applications of the petitioner for refund of mandatory statutory obligation pre-deposit with interest made with appeals filed before the Tax Board. With the consent of the learned counsel for the parties, the matters have been heard finally. The following substantial questions of law are proposed for adjudication in these revisions :- A. Whether in the facts and circumstances of the case, the learned Rajasthan Tax Board exercised its jurisdiction excessively and with material irregularity by ignoring the order dated 14.11.2018 passed by NCLAT, New Delhi read with the resolution plan and as well as not adhering to the orders passed by Hon'ble Supreme Court dated 26.07.2019 & 19.05.2020 & 24.01.2020 and the judgment dated 07.04.2020 of the Hon'ble Division Bench of Rajasthan High Court in true spirit of law and in rejecting the prayer to refund the amount paid as pre-deposit with the appeals (along with interest)? B. Whether in the facts and circumstances of the case, the learned Rajasthan Tax Board wrongly exercised its jurisdiction and acted with material irregularity as on one hand it has held that in view of order dated 14.11.2018 passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner UltraTech Cement Limited for Rehabilitation/Revival of the sick industrial unit, i.e. Binani Cement Ltd. As a consequence to acceptance of its Resolution Plan and upon being declared the successful resolution applicant, the present petitioner took over the company Binani Cement Limited. In terms of the approved Resolution Plan, all liabilities of the sick unit, except those admitted by the NCLAT, as they existed prior to acceptance of the Resolution Plan stood wiped off. This proposition of law has been enunciated by Hon'ble Supreme Court in the case of State of Gujarat Vs. Essar Steel Ltd. [2016 SCC Online Guj 4125]. Despite acceptance of the petitioner's Resolution Plan, the GST Department continued to raise demands for the period prior to acceptance of the Resolution Plan, upon which Writ Petition No.9480/2019 (Ultra Tech Nathdwara Cement Ltd. Vs. Union of India & Ors.) came to be filed on behalf of the petitioner in this court, which was accepted vide order dated 07.04.2020 and the demands raised by the GST Department were quashed as being contrary to the IBC and the Judgment of Hon'ble Supreme Court in the case of Essar Steel Ltd. (supra). The said judgment of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Resolution Plan and with the approval of the petitioner as the successful resolution applicant, all outstanding demands of the Department against the defaulting unit M/s. Binani Cement Ltd. had been extinguished over and above the amount of Rs. 61.05 crores approved under the Resolution Plan. He pointed out that all existing liabilities of the unit prior to the acceptance of the Resolution Plan have been disposed off by the Commercial Taxes Department by a formal order dated 12.08.2021. Thus, the Department has no subsisting claim against the unit beyond the sum of Rs. 61.05 crores. If the respondent Department is permitted to retain the amounts paid towards mandatory statutory obligation with the appeals, it would amount to unjust enrichment of the Department, which is not at all warranted. In support of his contentions, Dr. Acharya relied upon the following judgments :- 1. Ghanshyam Mishra and Sons Private limited Vs. Edelweiss Asset Reconstruction Company Limited & Ors [2021 SCC Online SC 313] 2. GGS Infrastructure Private Limited Vs. Commissioner of CGST & Central Excise (WP-LD-VC-NO.269 of 2020) decided on 22.12.2020 3. M/s. Jagat Janani Services Vs. Goods & Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any order of an Assistant Commissioner, a Commercial Taxes Officer, an Assistant Commercial Taxes Officer or Junior Commercial Taxes Officer or Incharge of a check-post or barrier shall lie to the appellate authority. (2) The appeal shall be presented within sixty days of the date on which the order sought to be appealed against is communicated; but the appellate authority may admit an appeal even after the said period of sixty days if it is satisfied that the appellant had sufficient cause for not preferring the appeal within the said period. (3) Notwithstanding anything contained in sub-section (4) of section 38, no appeal under this section shall be entertained unless it is accompanied by a satisfactory proof of the payment of tax and other amounts admitted by the appellant to be due from him or of such installment thereof as might have become payable and in case of an appeal from an ex-parte assessment order, five percent of, and in other cases ten percent of the 3["disputed tax amount"]. (Emphasis supplied) (4) Notwithstanding that an appeal has been preferred to the appellate authority, the tax or any other sum shall, subject to the provisions contained in sub- sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and claims refund on account of sales in the course of export outside the territory of India, the assessing authority or officer authorized by the Commissioner may require such dealer to furnish such documents as may be prescribed and after having been satisfied shall within thirty days from the date of such claim, grant the dealer a refund in cash. (3) Where an amount or tax is collected from any person who is not registered under this Act and such amount or tax is not found payable by him, or where an amount in lieu of tax for any works contract is deducted in any manner by an awarder from any bill of payment to a contractor, who is not liable to pay tax under this Act, the amount so collected or deducted shall be refunded in the prescribed manner by the Assistant Commissioner or the Commercial Taxes Officer, as the case may be, in whose territorial jurisdiction such person or contractor ordinarily resides; and where such person or contractor does not reside in the State, then such refund shall be made by such officer as may be directed by the Commissioner. [(3A) Where any amount has been deposited wrongly or in excess, by a dealer and it is found that such amount is not pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount, is satisfied that the payment made by a dealer or a person is in excess of any tax, penalty, interest or other sum due, as a result of an assessment made or in pursuance of an order passed by any competent officer, authority or court, such assessing authority or authorised officer, either suo motu or on an application made in this behalf in Form VAT-20 or VAT-21 or VAT22 as the case may be, shall pass an order for refund within fifteen days of such assessment or receipt of such order or receipt of completed application. Refund order shall be passed in favour of a dealer or a person who has account in a bank having core banking system (CBS) in Form VAT-23A, and in case of others in Form VAT-23.]" On going through the aforesaid provisions of the Act of 2003 and the Rules of 2006, it becomes clear that mandatory statutory obligation pre-deposit with the appeal comprises of a proportion of VAT liability imposed upon the assessee by the assessing authority. M/s. Binani Cement Limited became sick and during pendency of the insolvency proceedings and Corporate Insolvency Resolution process was undertaken under the IBC, 2016. With the acceptance of the Resolution Plan of the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2021. Once the tax liability raised by the Department had been fixed by effect of acceptance of Resolution Plan, manifestly, the Department could not hold on to any payment made by the assessee in excess of what has been approved under the Resolution Plan, i.e. Rs. 61.05 crores. The reasoning given by the Tax Board in the impugned orders that the amount deposited by the assessee by way of statutory pre-deposit was not a part of the Resolution Plan is absolutely without foundation for the simple reason that this amount was a proportion of the tax liability fixed on the assessee and once the total tax liability has been quantified by the NCLAT, any amount paid by the assessee over and above such amount would have to be reimbursed as per Section 53 (3) (3A) of the Act of 2003 read with Rule 27 of the Rules of 2006. The Tax Board held that the burden of establishing that the amount deposited with the appeals by way of mandatory statutory obligation was also a part of the Resolution proceedings and in absence of any such material, the appellant could not stake a claim for the same. Superficially this logic of the Tax Board appears to be justified in view the stipulation made in Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 20.3.2019 (Annex.12), notice dated 6.3.2019 (Annex.13), notice dated 8.3.2019 (Annex.14), notice dated 29.3.2019 (Annex.15), notice dated 29.3.2019 (Annex.16), notice dated 10.4.2019 (Annex.18), order dated 9.4.2019 (Annex.19), two notices dated 11.6.2019 (Annex.20) and any further demands pending as on the date of finalization of the resolution plan issued/raised by the respondents Central Goods and Service Tax Department, Govt. of India are quashed and struck down." Drawing analogy from the conclusions drawn by this court in the judgment dated 07.04.2020, any demand made by the State Commercial Taxes Department in excess of that approved by the NCLAT would have to be struck off and if any amount has already been received over and above what has been approved under the Resolution Plan, the same would have to be refunded. The Commercial Taxes Department issued the order dated 12.08.2021, whereby it has been resolved as below :- Apparently, as per this order, all demands of the Department against the sick unit as they existed prior to date of transfer of the original unit to the petitioner, i.e. 25.07.2017, were disposed of in accordance with the Resolution Plan. The predep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That once a resolution plan is duly approved by the Adjudicating Authority under subsection (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan; (ii) 2019 amendment to Section 31 of the I&B Code is clarificatory and declaratory in nature and therefore will be effective from the date on which I&B Code has come into effect; (iii) Consequently all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under Section 31 cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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