Patanjali Foods Limited Vs Assistant Commissioner CGST Narela Division & Ors. (Delhi High Court)
The Delhi High Court considered a writ petition challenging a GST order-in-original dated 21 January 2025 and corrigendum dated 3 February 2025, which raised demands for the financial year 2017–18. The petitioner had taken over the business of Ruchi Soya Industries Ltd. pursuant to a resolution plan approved by the National Company Law Tribunal (NCLT), Mumbai Bench, during insolvency proceedings. The resolution plan submitted by a consortium led by Patanjali Ayurved Limited was approved by the NCLT, following which the company was taken over as a going concern on a “clean slate” basis and renamed as Patanjali Foods Limited.
Subsequently, audits relating to the pre-resolution period culminated in a show cause notice dated 18 June 2024 and the impugned GST demands covering multiple years. The principal contention of the petitioner was that demands relating to periods prior to approval of the resolution plan could not survive, as all such claims stood extinguished upon approval of the plan.
The Court examined the sequence of NCLT orders dated 24 July 2019 and 4 September 2019 to determine the effective date of approval of the resolution plan. While the order dated 24 July 2019 approved the plan subject to modifications and required further disclosures regarding source of funds, CIRP costs, and acceptance of modifications, the subsequent order dated 4 September 2019 granted final approval for effective implementation of the resolution plan.
