Rajasthan High Court - Jodhpur
M/S Ultratech Nathdwara Cement ... vs The Assistant Commissioner, ... on 18 April, 2022
Bench: Sandeep Mehta, Vinod Kumar Bharwani
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
D.B. Sales Tax Ref./rev. No. 9/2021
M/s Ultratech Nathdwara Cement Limited, Adityanagar, Tehsil
Pindwara Dis. Sirohi
----Petitioner
Versus
1. The Assistant Commissioner, Commercial Tax
Department, Special Circle, Pali, Special Circle, Pali
2. The Appellate Authority-II, Commercial Taxes
Department, Jodhpur
----Respondents
Connected With
D.B. Sales Tax Ref./rev. No. 10/2021
M/s Ultratech Nathdwara Cement Limited, Adityanagar, Tehsil
Pindwara Dis. Sirohi
----Petitioner
Versus
1. The Assistant Commissioner, Commercial Tax
Department, Special Circle, Pali, Special Circle, Pali
2. The Appellate Authority-II, Commercial Taxes
Department, Jodhpur
3. The Appellate Authority-II, Commercial Taxes
Department, Jodhpur
----Respondents
D.B. Sales Tax Ref./rev. No. 11/2021
M/s Ultratech Nathdwara Cement Limited, Adityanagar, Tehsil
Pindwara, Dis. Sirohi
----Petitioner
Versus
1. The Assistant Commissioner, Commercial Tax
Department, Special Circle, Pali, Commercial Tax
Department, Special Circle, Pali
2. The Appellate Authority - II, Commercial Taxes
Department, Jodhpur
(Downloaded on 19/04/2022 at 08:16:56 PM)
(2 of 28) [STR-9/2021]
----Respondents
D.B. Sales Tax Ref./rev. No. 12/2021
M/s Ultratech Nathdwara Cement Limited, Adityanagar, Tehsil
Pindwara Dis. Sirohi
----Petitioner
Versus
1. The Assistant Commissioner, Commercial Tax
Department, Special Circle, Pali, Commercial Tax
Department, Special Circle, Pali
2. The Appellate Authority-II, Commercial Taxes
Department, Jodhpur
----Respondents
D.B. Sales Tax Ref./rev. No. 13/2021
M/s Ultratech Nathdwara Cement Limited, Adityanagar, Tehsil
Pindwara, Dis. Sirohi
----Petitioner
Versus
1. The Commercial Taxes Officer, Anti Evasion, Anti Evasion
Rajasthan Circle-Ii, Jodhpur
2. The Appellate Authority - Ii, Commercial Taxes
Department Jodhpur
----Respondents
D.B. Sales Tax Ref./rev. No. 14/2021
M/s Ultratech Nathdwara Cement Limited, Adityanagar, Tehsil
Pindwara Dis. Sirohi
----Petitioner
Versus
1. The Assistant Commissioner, Commercial Tax
Department, Special Circle, Pali, District Pali
2. The Appellate Authority-II, Commercial Taxes
Department, Jodhpur
----Respondents
(Downloaded on 19/04/2022 at 08:16:56 PM)
(3 of 28) [STR-9/2021]
D.B. Sales Tax Ref./rev. No. 15/2021
M/s Ultratech Nathdwara Cement Limited, Adityanagar, Tehsil
Pindwara Dis. Sirohi
----Petitioner
Versus
1. The Commercial Taxes Officer, Anti Evasion, District Jaipur
2. The Appellate Authority-II, Commercial Taxes
Department, Jodhpur
----Respondents
D.B. Sales Tax Ref./rev. No. 16/2021
M/s Ultratech Nathdwara Cement Limited, Adityanagar, Tehsil
Pindwara, Dis. Sirohi
----Petitioner
Versus
1. The Assistant Commissioner, Commercial Tax
Department, Special Circle, Pali, District Pali
2. The Appellate Authority-II, Commercial Taxes
Department, Jodhpur
----Respondents
D.B. Sales Tax Ref./rev. No. 17/2021
M/s Ultratech Nathdwara Cement Limited, Adityanagar, Tehsil
Pindwara, Dis. Sirohi
----Petitioner
Versus
1. The Commercial Taxes Officer, Anti Evasion, District Jaipur
2. The Appellate Authority-II, Commercial Taxes
Department, Jodhpur
----Respondents
(Downloaded on 19/04/2022 at 08:16:56 PM)
(4 of 28) [STR-9/2021]
D.B. Sales Tax Ref./rev. No. 18/2021
M/s Ultratech Nathdwara Cement Limited, Adityanagar, Tehsil
Pindwara, Dis. Sirohi
----Petitioner
Versus
1. The Commercial Taxes Officer, Anti Evasion, District Jaipur
2. The Appellate Authority-II, Commercial Taxes
Department, Jodhpur
----Respondents
D.B. Sales Tax Ref./rev. No. 19/2021
M/s Ultratech Nathdwara Cement Limited, Adityanagar, Tehsil
Pindwara, Dis. Sirohi
----Petitioner
Versus
1. The Assistant Commissioner, Commercial Tax
Department, Special Circle, Pali, District Pali
2. The Appellate Authority-II, Commercial Taxes
Department, Jodhpur
----Respondents
For Petitioner(s) : Dr. Sachin Acharya, Senior Advocate,
assisted by Mr. Manish Priyadarshi
and Mr. Gopal Sandu
For Respondent(s) : Mr. Hemant Dutt
HON'BLE MR. JUSTICE SANDEEP MEHTA
HON'BLE MR. JUSTICE VINOD KUMAR BHARWANI
Order
Date of pronouncement : 18/04/2022
Order reserved on : 24/02/2022
BY THE COURT : PER HON'BLE MEHTA, J.
Reportable
(5 of 28) [STR-9/2021]
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
(6 of 28) [STR-9/2021]
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
(7 of 28) [STR-9/2021]
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
(8 of 28) [STR-9/2021]
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 :-
"(vii) vihykFkhZ ds fo:) l`ftr vkSj bu vihyksa esa fooknxzLr ekax
jkf"k;ksa dh oS/krk ekuuh; loksZPp U;k;ky; ds le{k u rks fopkjk/khu Fkh
(9 of 28) [STR-9/2021]
vkSj u gh bl lEcU/k esa dksbZ fu.kZ; iznku fd, x;s gSA izR;FkhZ foHkkx }kjk
ekuuh; loksZPp U;k;ky; esa vihykFkhZ ds fo:) dqy l`ftr esa ls rRle;
cdk;k ekax :i;s 479]73]13][email protected]& ds fo:) ,u-lh-,y-,-Vh- }kjk
dsoy :i;s 61-05 djksM+ gh Lohd`r djus dks pqukSrh iznku dh x;h FkhA
ekuuh; loksZPp U;k;ky; }kjk fof/kd fcUnq dks [kqyk NksMrs gq, vius
fu.kZ; fnukad 26-07-2019 esa dsoy ;g fu/kkZfjr fd;k x;k gS fd foHkkx dh
^VªkalQj MsV* dks vihykFkhZ ds fo:) dqy cdk;k ekax esa ls dsoy :i;s
61-05 djksM+ dh olwyh djus ds gh vf/kdkj gSaA vr% gLrxr vihyksa esa
vihyh; izkf/kdkjh }kjk iq'V ekax oS/k ,oa vafre (Legal & Final) rks gks
x;h gS ysfdu blesa ls foHkkx dks dsoy :i;s 61-05 djksM+ dh olwyus dk
vf/kdkj jg x;k gSA vr% bu vihyksa esa fooknxzLr ekax dh olwyh ¼;fn iwoZ
esa tek ugha ik;h tk,½ ekuuh; loksZPp U;k;ky; ,oa ,u-lh-,y-,-Vh- }kjk
vuqer lhek (Permissible Limits) rd djus dks foHkkx Lora= jgsxkA
(ix) fopkjk/khu vihyksa dks vihykFkhZ dh izkFkZuk ij [kkfjt dj fn, tkus
ls buesa fookfnr ekax dh oS/krk ds laca/k esa vihyh; izkf/kdkjh dk fu.kZ;
vfUrerk izkIr dj pqdk gSA vihykFkhZ }kjk dkuwu (Statute) ds vUrxZr
l`ftr ekax ds fo:) vihy is"k djus gsrq vkKkid lkafof/kd nkf;Ro
(Mandatory Statutory Obligation) ds fuoZgu esa fjQ.M pkgh tk jgh
jkf"k tek djok;h x;h gSA LVsV~;wVjh ØsfMVj dks jkf"k tek djkuk
vihykFkhZ dk nkf;Ro (Liability) gks ldrk gS ifjlEifRr (Asset) ughaA
vihykFkhZ bdkbZ :X.k (Sick) ugha gksrh vkSj gLrxr vihyksa esa vUrxzZLr
fookn fcUnqvksa dks fu.kZ; loksZPp Lrj ls Hkh vihykFkhZ ds fo:) gqvk gksrk
rks D;k iwoZ esa tek jkf"[email protected] jkf"k rc Hkh ifjlEifRr gh le>h tkrh \
fooknxzLr ekax jkf"k ds voS/k gksus ds lEcU/k es vkt fnukad dks fdlh Lrj
ls dksbZ fu.kZ; vfLrRo esa ugha gS A
(10 of 28) [STR-9/2021]
(x) Lo;a fjtksY;w"ku ,IyhdsaV ¼vYVªkVsd lheasV fyfeVsM½ }kjk izLrqr ,oa
,u-lh-,y-,-Vh- }kjk Lohd`r fjtksY;w"ku Iyku esa izR;FkhZ foHkkx dks
^vkWijs"kuy LVsV~;wVjh ØssfMVj* Lohdkj fd;k x;k gSA izR;FkhZ foHkkx }kjk
,u-lh-,y-,-Vh- ds le{k izLrqr vius Dyse :i;s 479]73]13][email protected]& esa
vihy is"k djus gsrq vihykFkhZ }kjk vkKkid :i ls tek djk;h x;h jkf"k
dks "kkfey ugha fd;k x;k rFkk nkok dsoy rRle; vnRr (unpaid) jkf"k
ds fy, gh fd;k x;kA ,d gh ekax jkf"k dk ,d Hkkx ¼iwoZ esa tek djk;k
x;k½ ^ifjlEifRr* vkSj foyqIr nkf;Ro lfgr nwljk vnRr Hkkx ¼VªkalQj MsV
dks cdk;k½ ^nkf;Ro* gksus dh vihykFkhZ dh cgl vkRe?kkrh (Self
defeating) gSA vihykFkhZ }kjk ^VªkalQj MsV* ls iwoZ tek djk;h tk pqdh
jkf"k lQy fjtksY;w"ku ,IyhdsaV dks fjQ.M djus ij ,u-lh-,y-,-Vh- vFkok
ekuuh; loksZPp U;k;ky; }kjk u rks fopkj fd;k x;k vkSj u dksbZ fu.kZ;
iznku fd;k x;kA vr% izFke vihy izLrqfr ds le; lkafof/kd ck/;rk ds
dkj.k vihykFkhZ }kjk tek djk;h x;h jkf"k vihykFkhZ dks ykSVkus ;ksX; ugha
gSA QyLo:i bl jkf"k ds fjQ.M dh izkFkZuk ds lEcU/k esa vihykFkhZ ds
fofo/k izkFkZuk&i= vLohdkj fd;s tkrs gSA"
The Tax Board was of the view that if the appeals had
been dismissed, the petitioner would not have been in position to
claim refund of the mandatory statutory obligation pre-deposit
amounts. Refund of such amount would only be admissible in the
event of appeals being accepted. However, neither of the
consequences ensued and since the demands prior to acceptance
of the resolution plan had simply been disposed off and as the
Department had not incorporated the amounts towards pre-
deposit in the claim filed before the NCLAT, the argument of the
petitioner regarding the entire liability of the sick unit towards the
respondent Department including the pre-deposit amounts also
(11 of 28) [STR-9/2021]
having been washed off was self-defeating. Accordingly, the
appeals and the applications for refund were dismissed by the Tax
Board by the common order dated 28.12.2020, which is assailed
in these revisions with a prayer to refund the amounts furnished
as mandatory pre-deposit while filing the appeals.
Learned Senior Advocate Dr. Sachin Acharya, learned
Senior Advocate, assisted by Mr. Manish Priyadarshi and Mr. Gopal
Sandu, Advocates, representing the petitioner, vehemently and
fervently urged that the appeals preferred by the petitioner were
disposed off as infructuous on account of the fact that the
respondent Department itself accepted that pursuant to the
acceptance of 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 :-
(12 of 28) [STR-9/2021]
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 Tax
Council and Others [W.P.(C) No.17196 of 2020] decided on
21.09.2021
4. Suvidhe Ltd. Vs. Union of India, 1996 (82) ELT 177
(Bom.) (Affirmed in Union of India Vs. Suvidhe Ltd.,
[(2016) 11 SCC 808)])
5. State of Gujarat Vs. Essar Steel Ltd. [2016 SCC Online
Guj 4125]
6. Nelco Limited Versus Union of India [2001 SCC Online
Bom 1251]
and prayed that the revisions deserve to be accepted
and the amounts pre-deposited with the appeals by way of
mandatory statutory obligation deserve to be reimbursed to the
petitioner with interest.
Per contra, Mr. Hemant Dutt, learned counsel
representing the respondent Commercial Taxes Department,
vehemently opposed the submissions advanced by Dr. Acharya.
He contended that the amounts pre-deposited with the appeals
filed by Binani Cement Ltd. as mandatory statutory obligation
were never claimed by the Department during the resolution
proceedings. The pre-deposits were mandatory for filing the
(13 of 28) [STR-9/2021]
appeals, which were withdrawn and hence, the petitioner cannot
claim refund of such amounts. He urged that the petitioner would
have been acting well within its right to request for refund of the
pre-deposits in case the appeals had been accepted. However, as
the appeals were withdrawn, the claim for refund got extinguished
as an automatic consequence. He, thus, submitted that the
instant bunch of revisions does not involve any substantial
question of law and hence, the same should be dismissed.
We have given our thoughtful consideration to the
submissions advanced at bar and have gone through the material
available on record as well as the impugned orders.
The Department acted under the Act of 2003 and
issued notices/assessment orders raising demands of outstanding
tax and penalty etc. from the unit M/s. Binani Cement Ltd. for the
Financial Years 2005-06, 2006-07, 2007-08, 2007-2008, 2008-
2009, 2009-2010, 2010-2011, 2013-2014, 2014-2015, 2015-
2016. M/s. Binani Cement Ltd. assailed these demands by filing
appeals as referred to supra before the learned Tax Board. Pre-
deposit of a percentage of the assessed amounts was paid with
the appeals by way of mandatory statutory obligation as per
Section 82 (3) of the Act of 2003. The procedure for filing the
appeals is provided under Section 82 of the Act of 2003, which
reads as below :-
82. Appeal to the appellate authority.- (1) Subject to
the provisions of section 86, an appeal against any
order of an Assistant Commissioner, a Commercial
Taxes Officer, an Assistant Commercial Taxes Officer or
Junior Commercial Taxes Officer or Incharge of a
(14 of 28) [STR-9/2021]
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-
sections (4) and (5) of section 38, be paid in
accordance with the order against which appeal has
been preferred.
(5) The appeal shall be in the prescribed form and shall
be verified in the prescribed manner.
(15 of 28) [STR-9/2021]
(6) The following shall have the right to be heard at the
hearing of the appeal, -
(a) the appellant, either in person or by the authorized
representative;
(b) the authority or officer against whose order the
appeal has been preferred either in person or by a
representative.
(7) The appellate authority may, before disposing of
any appeal make such further enquiry as it thinks fit, or
may direct the assessing authority or the officer against
whose order appeal has been preferred to make further
enquiry and report the result of the same to the
appellate authority and in disposing of the appeal the
said authority may,-
(a) in the case of an order of assessment, interest or
penalty,-
(i) confirm, enhance, reduce or annul the
assessment, interest or penalty; or
(ii) set aside the order of assessment, interest or
penalty and direct the assessing authority
to pass fresh order after such further enquiry as
may be directed; and
(b) in the case of any other order, confirm, cancel, vary
or remand such order.
(8) The appellate authority shall send a copy of the
order passed by it to the appellant, the assessing
authority or such authority against whose order the
appeal has been preferred, the Deputy Commissioner
(Administration) concerned and the Commissioner."
(16 of 28) [STR-9/2021]
Section 82(3) of the Act of 2003 imposes a mandatory
statutory obligation of making a pre-deposit for entertaining an
appeal. In appeals against ex parte assessment orders, the
mandatory statutory pre-deposit would be 5% of the Value Added
Tax and 10% of the Value Added Tax amount in other cases.
Section 53 of the Act of 2003 deals with the concept of
refund and reads as below :-
53. Refund.- (1) Where any amount is refundable to a
dealer under the provisions of this Act, after having
duly verified the fact of 1["deposit of such amount"],
the assessing authority or the officer authorized by the
Commissioner, shall in the prescribed manner refund to
such dealer the amount to be refunded either by cash
payment or by adjustment against the tax or other sum
due in respect of any tax period.
2[****]
(2) Notwithstanding anything contained in this Act,
where a registered dealer files a return 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
(17 of 28) [STR-9/2021]
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 payable or has been deposited in excess
of the amount payable by the dealer for the tax period
mentioned in the challan, the Commissioner or any
officer as authorized by the Commissioner in this behalf
shall direct the assessing authority to grant refund of
the said amount in the manner as prescribed.]
(4) [Where refund of any amount becomes due to a
dealer, he shall be entitled to receive, in addition to the
amount of refund, simple interest at such rate as may
be notified by the State Government with effect from
1st April of the year immediately following the year to
which it relates upto the date of payment:
Provided that where the dealer has paid any amount of
tax after the closing of the year and such amount is
required to be refunded, no interest shall be payable
for the period prior to the date of the deposit of such
amount.]
(5) Notwithstanding anything contained in this section
or in any other law for the time being in force, only the
dealer or the person, who has actually suffered the
(18 of 28) [STR-9/2021]
incidence of tax or has paid the amount, can claim a
refund and the burden of proving the incidence of tax
so suffered or the amount so paid shall be on the
dealer or the person claiming the refund.
[(6) Where tax is collected on any official or personal
purchase by Foreign Diplomatic Missions or their
Diplomats or by UN Bodies or their Diplomats, it shall
be refunded to such person or Mission or Bodies, as the
case may be, within thirty days of the receipt of the
application, by such officer as may be authorized by
the State Government in this behalf by notification.]"
As per Section 53 (4) of the Act of 2003, where refund
of any amount becomes due to a dealer, he shall be entitled to
receive simple interest at such rate as may be notified by the
State Government.
The Act of 2003 has further been supplemented by the
Rajasthan Value Added Tax Rules, 2006 (for short, "the Rules of
2006"). Rule 27 of the Rules of 2006 also deals with refund of
excess tax/penalty/interest/other sum due, as a result of an
assessment made or in pursuance of an order passed by any
competent officer, authority or court, and is quoted hereinbelow
for the sake of ready reference :-
"27. Refund.-(1) (a)Subject to the provisions of sub-
section (2) of section 17, section 53 and section 54, the
assessing authority or the authorised officer, after
having verified the fact of deposit of such 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,
(19 of 28) [STR-9/2021]
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 VAT-
22 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 petitioner who was
declared the successful applicant by the NCLAT, the petitioner
gained absolute control over the unit and was under an obligation
to discharge the existing liabilities of the sick unit, strictly in terms
of the Resolution Plan approved by the NCLAT. It is not in dispute
that the respondent Department had submitted a claim for an
outstanding amount of Rs.479,73,13,819/- before the NCLAT in
the resolution proceedings in the capacity of an operational
creditor. The amount so claimed would relat to Value Adeed Tax
and nothing else. The NCLAT disposed of the demands raised by
all corporate/operational creditors including the respondent
Department while accepting its claim only for a sum of Rs.61.05
(20 of 28) [STR-9/2021]
crores. It may be mentioned here that the respondent
Commercial Taxes Department challenged the order of the NCLAT
by filing a SLP, which was dismissed by Hon'ble Supreme Court.
Thus, the liability of the petitioner towards the respondent
Department was fixed at Rs.61.05 crores. Any demand made or
amount retained by the Department beyond the said sum of
Rs.61.05 crores either from the sick unit or from the petitioner
would, thus, be invalid as being contrary to the Resolution Plan
approved by the NCLAT.
Consequently, all that the Department could claim from
the petitioner, being the successful resolution applicant, would be
the said amount and nothing beyond that.
It cannot be disputed that if the appeals had been
accepted on merits, a fortiori, the amounts deposited with the
appeals as mandatory statutory obligation would have to be
reimbursed to the assessee. Nonetheless, the Tax Board was not
called upon to decide the appeals on merits because the
Department itself took a conscious logical decision to dispose all
liabilities of the sick unit as they existed prior to acceptance of the
Resolution Plan and hence, the petitioner was not required to
invoke the appellate jurisdiction of the Tribunal for getting the
appeals decided on merits. The applications were correctly moved
by the petitioner for withdrawal of the pending appeals, which had
virtually become infructuous with the liabilities of the unit towards
the Department having been settled by the NCLAT. The
withdrawal of the appeals was as good as acceptance because in
effect, all the outstanding liabilities of the Department stood
(21 of 28) [STR-9/2021]
disposed of, by virtue of the Department's order dated
12.08.2021.
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 Section 53
(5) of the Act of 2003 that the burden of proof is on the dealer or
the person claiming the refund. However, when the situation is
considered in light of the order passed in the insolvency
proceedings, it becomes clear that the entire tax liability accruing
to the Department was put forth by way of a claim filed by the
Department before the NCLAT in the capacity of a statutory
(22 of 28) [STR-9/2021]
creditor. As the NCLAT comprehensively decided the claim of the
Department and restricted the liability of the Resolution applicant,
i.e. the petitioner herein, towards the Department to Rs.61.05
crores, it can be presumed that there was no other liability of the
petitioner against the outstanding amounts due to be paid by way
of Commercial Taxes. The Resolution Plan having been approved
and the claim of the Department having been finally decided by
the NCLAT, if at all the Department was desirous of claiming that
the pre-deosit amounts were exclusive and beyond the claim filed
by the Department before the NCLAT, then the burden would be
on the Department to prove the same. The assessee discharged
the burden put upon it by Section 53 (5) of the Act of 2003 by
virtue of the Resolution Plan finalized by the NCLAT. Thus, the
finding recorded by the Tax Board that the amount of pre-deposits
were distinct and were not covered under the claim filed by the
Department before the NCLAT has no foundation whatsoever.
The petitioner questioned validity of the demand
notices issued by the CGST Department in relation to the period
prior to the transfer date on which the petitioner took over the
company M/s Binani Cement Ltd. in proceedings under the IBC,
2016 by filing a Writ Petition No.9480/2019 (Ultra Tech
Nathdwara Cement Ltd. Vs. Union of India & Ors.), which
was accepted by this court vide order dated 07.04.2020 by
making the following observations :-
"Therefore, we are of the firm opinion that the
respondents would be acting in a totally illegal and
arbitrary manner while pressing for demands raised
vide the notices which are impugned in this writ
(23 of 28) [STR-9/2021]
petition and any other demands which they may
contemplate for the period prior to the resolution plan
being finalized.
The demand notices are ex-facie illegal, arbitrary
and per-se and cannot be sustained.
Accordingly, the impugned demand notices and
orders viz. notice dated 11.2.2019 (Annex.10), letter
dated 7.9.2018 (Annex.11), order 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 :-
"vr% IBC-2016 ds izko/kkuksa ¼fo"ks'k Section238½ ds vuqlj.k esa
National Company Law Appellate Tribunal, new Delhi (NCLAT) }kjk
fnukad 14-11-2018 dks [email protected] fd;k x;k Resolution Plan rFkk
ekuuh; loksZPp U;k;ky; vkns"k fnukad 19-05-2020 dh vuqikyuk esa mDr
O;olk;h QeZ ds fo:) Transfer Date ¼25-07-2017½ ls iwoZ dh vof/k gsrq
(24 of 28) [STR-9/2021]
l`ftr dh xbZ leLr cdk;k ekax jkf"k mDr lkj.kh (DCR vuqlkj) dqy
106 i`fof'V;ka ,oa lacaf/kr dqy jkf"k : 513-09 djksM+ fuLrkfjr (Disposed
Off) dh tkrh gSA mDr vkns"k v/kksgLrk{kjdrkZ ds dk;kZy; }kjk Jheku~
vfrfjDr vk;qDr ¼dj½ okf.kfT;d dj foHkkx jktLFkku ¼ekQZr mik;qDr
iz"kklu ok-d-ikyh½ dks ekxZn"kZu gsrq fy[ks x;s i=kad 21-12-2020 ds lanHkZ
esa Jheku~ vfrfjDr vk;qDr ¼dj½ i=kad 391 fnukad 11-08-2021 ¼layXu½ ds
vuqØe esa Jheku~ vk;qDr egksn; okf.kfT;d dj foHkkx jktLFkku ls
vuqeksfnr gSA"
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 pre-
deposits, of which refund is sought by the petitioner, had been
made by way of mandatory statutory obligation while filing
appeals before the Tax Board as part of the tax liability of M/s.
Binani Cement.
However, as all demands raised by the Department for
the date prior to the taking over of the sick unit under the
Resolution Plan have been disposed of, the appeals pending before
the Tax Board became infructuous as the liability of the successful
Resolution Applicant, i.e. the petitioner herein, qua the
Commercial Taxes Department stood extinguished beyond what
has been quantified by the Tribunal.
In the case of Ghanshyam Mishra & Sons Pvt. Ltd.
Vs. Edelweiss Asset Reconstruction Company Ltd. (supra),
the Hon'ble Supreme Court examined an identical controversy and
held as below :-
(25 of 28) [STR-9/2021]
"23. The appellant therefore filed a Civil Miscellaneous
Writ Petition No. 354/2020 before the High Court of
Allahabad challenging the order passed by the
Additional Commissioner Grade 2 (Appeal) dated
30.1.2020, to the effect, that the proceedings in the
State of U.P. would remain unaffected irrespective of
the approval of the Resolution Plan of the appellant by
NCLT. The appellant also prayed for a declaration, that
all the proceedings pending before different authorities
stand abated in terms of the approval of the Resolution
Plan by NCLT. A prayer was also made for refund of
Rs.248.92 lakhs deposited by the appellant under
protest and for return of the Bank Guarantee.
77. It is clear, that the mischief, which was noticed
prior to amendment of Section 31 of I&B Code was,
that though the legislative intent was to extinguish all
such debts owed to the Central Government, any State
Government or any local authority, including the tax
authorities once an approval was granted to the
resolution plan by NCLT; on account of there being
some ambiguity, the State/Central Government
authorities continued with the proceedings in respect of
the debts owed to them. In order to remedy the said
mischief, the legislature thought it appropriate to clarify
the position, that once such a resolution plan was
approved by the Adjudicating Authority, all such
claims/dues owed to the State/Central Government or
any local authority including tax authorities, which were
not part of the resolution plan shall stand extinguished.
95. In the result, we answer the questions framed by
us as under:
(i) 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
(26 of 28) [STR-9/2021]
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 could be continued.
132. The appeal therefore is allowed. The impugned
judgment and order dated 6.7.2020 passed by the
Allahabad High Court is quashed and set aside. We hold
and declare, that the respondents are not entitled to
recover any claims or claim any debts owed to them
from the Corporate Debtor accruing prior to the
transfer date. Needless to state, that the consequences
thereof shall follow."
(27 of 28) [STR-9/2021]
The controversy at hand is virtually concluded by the
observations made at para 132 of the above judgment, wherein
Hon'ble Supreme Court has categorically held that the
respondents are not entitled to recover any claims or claim any
debts owed to them by the corporate debtor accruing prior to
transfer date and "that consequences shall follow".
As the original assessee, i.e. M/s. Binani Cement Ltd.,
was compelled to file the appeals with pre-deposits of a
percentage of the tax liability by way of mandatory statutory
obligation as per the assessment orders issued by the Commercial
Taxes Department, the consequential relief pursuant to
extinguishment of the demands under the assessment order would
definitely require a direction for refund of the amount to the
successful Resolution Applicant, i.e. the petitioner herein, who
took over the assets and liabilities of the sick unit according to the
Resolution Plan approved by the NCLAT.
In the case of State of Gujarat Vs. Essar Steel Ltd.
(supra), Hon'ble Gujarat High Court directed refund of pre-
deposit on acceptance of the appeals and decided the issue in
favour of the assessee. In the present case, though the appeals
have not been accepted, but an analogous situation has been
created with acceptance of the Resolution Plan and
extinguishment of all debts/liabilities of the sick unit towards the
statutory creditor, i.e. the State Government/Commercial Taxes
Department.
As a consequence, the consolidated impugned order
dated 28.12.2020 passed by the Rajasthan Tax Board, Ajmer in
the appeals filed by the petitioner is set aside to the extent the
(28 of 28) [STR-9/2021]
applications filed by the petitioner for refund of pre-deposit
amounts with interest were rejected. The amounts deposited by
M/s. Binani Cement Ltd. as mandatory statutory obligation while
filing the appeals before the Tax Board shall be reimbursed to the
petitioner within a period of three months from today with interest
at the rate applicable by law.
The revisions are allowed in these terms.
(VINOD KUMAR BHARWANI),J (SANDEEP MEHTA),J
56-Pramod/Devesh-
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