Ultratech Nathdwara Cement Limited Vs Assistant Commissioner (Rajasthan High Court)
This bunch of Sales Tax Revisions involves identical questions of facts and law and hence, the same is being decided together by a common order. These revisions have been preferred by the petitioner M/s. UltraTech Nathdwara Cement Limited for assailing the order dated 28.12.2020 passed by the Rajasthan 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 NCLAT, New Delhi read with the resolution plan and orders passed by Hon’ble Supreme Court dated 26.07.2019 and 19.05.2020 and 24.01.2020 and the judgment dated 07.04.2020 of the Hon’ble Division Bench of Rajasthan High Court, maximum amount which can be recovered from the petitioner is Rs. 61.05 Cr while on another hand has rejected the refund of pre-deposit amount which was deposited and lying with the respondent department in excess of Rs. 61.05 Cr?
Brief facts, relevant and essential for disposal of these revisions are noted hereinbelow :-
The Assistant Commissioner, Commercial Taxes Department issued VAT assessment orders fixing liability of company M/s. Binani Cement Limited for different periods ranging from 2005-06 to 2015-16 and also imposed upon it, additional tax and interest. These orders were carried by M/s. Binani Cement Limited in appeal to the Deputy Commissioner (Appeals), Commercial Taxes Department, Jodhpur, who dismissed the same by separate orders. Being aggrieved by the orders passed by the assessing authority and the appellate authority, M/s. Binani Cement Limited preferred appeals before the Rajasthan Tax Board, Ajmer.
As per Section 82 (3) of the Rajasthan Value Added Tax Act, 2003 (for short, “the Act of 2003”), the appeals were entertained with the mandatory statutory pre-deposit of stipulated percentage of the amounts levied under the disputed Tax Assessment orders.
Binani Cement Ltd. suffered losses and became sick during the pendency of these appeals, whereupon its Creditors initiated Insolvency procedure under the Insolvency and Bankruptcy Code, 2016 (for short, hereinafter referred to as ‘the IBC, 2016’) before the National Company Law Tribunal, Kolkata (for short, ‘NCLT’). Various players including the petitioner M/s UltraTech Nathdwara Cement Ltd. submitted their Resolution Plans before the NCLT. The respondent Commercial Taxes Department, in the capacity of an operational statutory creditor, made a claim to the tune of Rs.479,73,13,819/- towards Value Added Tax in the resolution proceedings. By virtue of the orders of Hon’ble Supreme Court, the resolution proceedings were transferred to the National Company Law Appellate Tribunal (for short, ‘NCLAT’), which admitted claim of the Department to the extent of Rs.61.05 Crores only and dismissed the remaining claim. The NCLAT approved the Resolution Plan submitted by the petitioner 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 court has attained finality.
Pursuant to acceptance of its Resolution Plan, the petitioner stepped into the shoes of the original appellant M/s. Binani Cement Ltd. in the pending appeals before the Tax Board. As the Commercial Taxes Department was itself contemplating to dispose off the outstanding demands against the sick unit as a consequence of the NCLAT’s acceptance of the petitioner’s Resolution Plan, applications seeking withdrawal of the appeals and refund of the amount of pre-deposits made by way of mandatory statutory obligation alongwith the appeals filed before the Tax Board on behalf of the petitioner. All the appeals were disposed off by the Tax Board by the common order dated 28.12.2020 observing that all demands of the Commercial Taxes Department, Government of Rajasthan beyond a sum of Rs.61.05 crores had been turned down by the NCLAT and hence, were not recoverable. Nonetheless, the prayer made by the petitioner for refund of the pre-deposit amount with interest was negated in the following terms :-
