Gujarat High Court
M/S. Ultratech Nathdwara Cement Ltd vs State Of Gujarat on 2 August, 2023
Author: Biren Vaishnav
Bench: Biren Vaishnav
NEUTRAL CITATION
C/SCA/7120/2021 JUDGMENT DATED: 02/08/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 7120 of 2021
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BIREN VAISHNAV
and
HONOURABLE MR. JUSTICE DEVAN M. DESAI
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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M/S. ULTRATECH NATHDWARA CEMENT LTD.
Versus
STATE OF GUJARAT
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Appearance:
MR. JAY S SHAH(7244) for the petitioner(s) No. 1
MS SHRUNJAL SHAH, ASST GOVERNMENT PLEADER for the
Respondent(s) No. 1,5
NOTICE SERVED for the Respondent(s) No. 2,3,6,7,8
NOTICE UNSERVED for the Respondent(s) No. 4
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CORAM:HONOURABLE MR. JUSTICE BIREN VAISHNAV
and
HONOURABLE MR. JUSTICE DEVAN M. DESAI
Date : 02/08/2023
ORAL JUDGMENT
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1. Rule returnable forthwith. With the consent of the learned advocates for the respective parties, matter is taken up for final hearing. Ms. Shrunjal Shah, learned AGP waives service of rule on behalf of the respondents.
2. By way of this petition, under Article 226 of the Constitution Of India, the petitioner has made the following prayers:
"1. Quash the impugned assessment orders, assessment notices and demand notice namely, notice no. 3069 dated 14.02.2019 (ANNEXURE- U) and notice no. 3105 dated 16.02.2019 (ANNEXURE-V) issued by the Respondent no.
6, notice dated 20.07.2020 (ANNEXURE-W) issued by Respondent no. 5, notice dated 18.07.2020 (ANNEXURE-P), order dated 22.01.2021 (ANNEXURE-S) and order dated 22.01.2021 (ANNEXURE-T); issued by the respective Respondents; and
2. Quash the pending proceedings against the Petitioner and refund the amount paid as pre-deposit;
3. Respondents may be restrained from raising any further demands or proceeding with Page 2 of 23 Downloaded on : Sat Sep 16 23:51:59 IST 2023 NEUTRAL CITATION C/SCA/7120/2021 JUDGMENT DATED: 02/08/2023 undefined any coercive steps so far as dues incurred in relation to the period prior to Transfer Date;
4. Provide directions for expeditious disposal of pending matters involving the Respondents; ...."
2. Facts in brief are as under:
2.1 The petitioner is a wholly owned subsidiary of Ultratech Cement Ltd and is engaged in the business of manufacturing and marketing of cement and allied products. Since Binani Cements was unable to pay the debt of the bank, the concerned bank had filed an before the NCLT. Vide order dated 25.07.2017, NCLT admitted the petition for initiating the CIRP process.
2.2 On 28.07.2017, a public announcement was made by the Resolution Professional (RP) inviting claims from all the creditors of the corporate debtor. The RP upon receipt of the claims maintained a list of creditors alongside the amount claimed by them and the security interest. On 28.05.2018, the CoC unanimously voted in Page 3 of 23 Downloaded on : Sat Sep 16 23:51:59 IST 2023 NEUTRAL CITATION C/SCA/7120/2021 JUDGMENT DATED: 02/08/2023 undefined favour of the resolution plan and therefore Ultratech emerged as the successful resolution applicant.
2.3 The Resolution plan was approved by the NCLAT vide order dated 14.11.2018. The challenge to the order before the Supreme Court failed. The name of the petitioner changed from Binani Cement to Ultratech Nathdwara Cement Limited w.e.f. 13.12.2018. The management was taken over on 20.11.2018. The petitioner informed the respondent no.2 vide letters dated 26.11.2018 and 26.12.2018 for the approval of the Resolution Plan.
2.4 Demands were raised by the respondents vide notice dated 16.2.2019 and letter dated 6.3.2019. The petitioner informed the respondents that in accordance with the resolution plan as approved by the order dated 14.11.2018, all litigations pertaining to the petitioner prior to the transfer date would stand withdrawn without any further act, instrument and the petitioner would be Page 4 of 23 Downloaded on : Sat Sep 16 23:51:59 IST 2023 NEUTRAL CITATION C/SCA/7120/2021 JUDGMENT DATED: 02/08/2023 undefined immune for attachment or interference. Reliance was placed on Section 31 of IBC and Section 238 of the IBC to submit that all liabilities would stand discharged.
2.5 A demand notice dated 18.7.2019 was received for tax dues of the FY 2016-2017. Thereafter, on 22.01.2021 assessment order was passed whereby respondent no. 5 confirmed demands of interest in lieu of delayed payment of GVAT and CST for the period from 1.4.2016 to 1.11.2016.
3. Mr. Jay Shah, learned advocate for the petitioner would submit that all the impugned notices and orders were bad once the Resolution Plan was in place and the Resolution Plan provided clauses especially 6.2.3.5 in respect of operation creditors like the respondents herein which proved exemption.
3.1 Mr. Shah, learned counsel for the petitioner would submit that in terms of the Resolution Plan, the claims of Page 5 of 23 Downloaded on : Sat Sep 16 23:51:59 IST 2023 NEUTRAL CITATION C/SCA/7120/2021 JUDGMENT DATED: 02/08/2023 undefined all the creditors including statutory operational creditors would stand extinguished and discharged upon the payment of the resolution plan. He would therefore submit that the present demands raised by the Respondents are untenable and bad in law and against the provisions of the Code.
4. Ms. Shrunjal Shah, learned AGP appearing for the respondents would rely on the affidavit-in-reply filed by the respondent no.5 and submit that if the petitioner is aggrieved by the assessment order dated 22.1.2021, the remedy lies in filing an Appeal under Section 73 of the Gujarat Value Added Tax Act,2003. The other submission is that since the respondents have assessed the dues by way of an order dated 22.01.2021 i.e. later in point of time to the acceptance of the Corporate Insolvency Resolution Plan and consequential order passed by the NCLT dated 14.11.2018, the respondent could not have claim any dues before 14.11.2018, as the audit assessment for Binani Cement had not been initiated by Page 6 of 23 Downloaded on : Sat Sep 16 23:51:59 IST 2023 NEUTRAL CITATION C/SCA/7120/2021 JUDGMENT DATED: 02/08/2023 undefined the respondent authorities to enable them to claim its dues before the Resolution Professional, the petitioner is required to pay the dues assessed for the Assessment Year 2016-2017 as determined by the assessment order dated 22.1.2021.
5. Having considered the submissions made by the learned advocates for the respective parties, it is apparent that the issue is decided by the Supreme Court in the case of Ghanshyam Mishra & Sons (P) Ltd.v.
Edelweiss Asset Reconstruction Co. Ltd reported in (2021) 9 SCC 657. The Supreme Court in the aforesaid case held that based on the provisions of the IBC, the Resolution Plan would be binding on all stakeholders after getting its seal of approval and therefore no surprise claims should be flung on the successful resolution applicant as the dominant purpose is to start with with a fresh slate. The operational creditors or the "other stakeholders" squarely cover the Central Government, any State Government or any local authorities, including Page 7 of 23 Downloaded on : Sat Sep 16 23:51:59 IST 2023 NEUTRAL CITATION C/SCA/7120/2021 JUDGMENT DATED: 02/08/2023 undefined tax authorities.
5.1 The case of the present petitioner was also before the Supreme Court in the case of Ghanshyam Mishra (supra). Paras 16 to 29 and 39 to 45, when read, make that position clear. The aforesaid paras read as under:
"16. The appellant is a wholly owned subsidiary of UltraTech Cement Limited and is engaged in the business of manufacturing and marketing of cement and allied products.
17. On 19.12.2015, the Additional Commissioner, Commercial Tax, Ghaziabad passed an order in the appeal preferred by M/s Binani Cement Limited, thereby, allowing the appeal filed by Binani Cement and setting aside the order of imposition of fine of Rs.24,71,885/. Vide another order dated 22.12.2015, passed in the appeal filed by Binani Cement, the order of imposition of fine of Rs.59,61,445/ also came to be set aside. Vide order dated 2.8.2017, the Deputy Commissioner, Commercial Tax, Division10, Ghaziabad held, that Binani Cement was liable to pay Entry Tax of Rs.40,47,344/ for the Assessment Year 20032004. By another order dated 2.8.2017, the Deputy Commissioner, Commercial Tax, Division10, Ghaziabad further held, that Binani Cement Page 8 of 23 Downloaded on : Sat Sep 16 23:51:59 IST 2023 NEUTRAL CITATION C/SCA/7120/2021 JUDGMENT DATED: 02/08/2023 undefined was liable to pay Entry Tax of Rs.43,06,715/ for the Assessment Year 20042005.
18. Since the said Binani Cement was unable to pay the debt to Bank of Baroda, the Bank of Baroda filed an application being C.A. (IB) No. 359/KB/2017 before NCLT, Kolkata Bench under Section 7 of I&B Code. Vide order dated 25.7.2017, NCLT admitted the petition for initiating the CIRP process. Vide the said order, NCLT also declared moratorium for the purposes referred to in Section 14 of I&B Code.
19. Vide communication dated 10.11.2017, the authorities were informed about the initiation of the CIRP. However, the authority by an endorsement made on the application of the appellant herein stated, that there was no stay granted by NCLT on tax assessment process. It was observed, that if there was any clear order passed by NCLT, the same should be produced or the Binani Cement should appear on the next date i.e. 27.11.2017 for hearing of tax assessment process.
20. On 28.7.2017, RP made a public announcement inviting claims from all the creditors of the Corporate Debtor, as is required under Section 15 of I&B Code. The last date for submission of claims was 8.8.2017. RP upon receipt of the claims maintained a list of creditors alongside the amount claimed by them and the security interest. RP also invited Page 9 of 23 Downloaded on : Sat Sep 16 23:51:59 IST 2023 NEUTRAL CITATION C/SCA/7120/2021 JUDGMENT DATED: 02/08/2023 undefined EOI. In response, various entities including the present appellant submitted their EOI as well as resolution plans. CoC in its meeting dated 28.5.2018, unanimously approved the Resolution Plan submitted by the present appellant. Pursuant to the approval by CoC, NCLAT granted approval to the Resolution Plan of appellant vide order dated 14.11.2018. The said order came to be challenged before this Court in Civil Appeal No. 10998/2018, which was dismissed by this Court vide order dated 19.11.2018.
21. On 13.12.2018, the name of the Corporate Debtor was changed to UltraTech Nathdwara Cement Limited from Binani Cement Limited and the management of the Corporate Debtor was taken over by Ultratech Cement Limited w.e.f. 20.11.2018. Thereafter, the appellant addressed various communications to the tax authorities, who are respondents herein informing them, that after the Resolution Plan was approved by NCLT, all proceedings instituted against the Corporate Debtor, arising and pending before the transfer date shall stand withdrawn. It was also informed, that all the liabilities towards operational creditors shall be deemed to have been settled by discharge and payment of the resolution amount by the Corporate Debtor. However, it was insisted by the tax authorities, that since there was no specific stay, proceedings could not be dropped.Page 10 of 23 Downloaded on : Sat Sep 16 23:51:59 IST 2023
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22. After various communications addressed by the appellant to the Joint Commissioner, Commercial Tax (Corporate Circle), Ghaziabad dated 26.4.2019, the following endorsements came to be made by the authority on 29.4.2019:
"After consideration on application presented by you, it is found that, by Hon'ble NCLT/NCLAT after transfer, neither stay is imposed on tax assessment nor on creation of demand. So the created demand is payable by you. If you are not agree with it, preferring appeal before higher authority, present its copy to us. Disposal is done of application presented by you." _______
23. The Commercial Tax Department of the State of Rajasthan filed Civil Appeal No. 5889/2019 challenging the Resolution Plan. However, the said appeal came to be dismissed vide order of this Court dated 26.7.2019. The appeals being Civil Appeal Nos. 630- 634/2020 were also preferred by the Commissioner of Central Excise, Goods and Services Tax, Jodhpur challenging the Resolution Plan. The same also came to be dismissed by this Court vide order dated 24.1.2020.
24. The appellant therefore filed a Civil Miscellaneous Writ Petition No. 354/2020 before the High Court of Allahabad challenging Page 11 of 23 Downloaded on : Sat Sep 16 23:51:59 IST 2023 NEUTRAL CITATION C/SCA/7120/2021 JUDGMENT DATED: 02/08/2023 undefined 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.
25. The Division Bench of the Allahabad High Court vide order dated 6.7.2020 observed, that the contention of the appellant with regard to the approval of the Resolution Plan by NCLT has been dealt with by the Assessing Authority as well as by the Appellate Authority and therefore, it was in the fitness of things that the appellant should avail of the alternative remedy of filing a second appeal available under the VAT Act. Being aggrieved by the same, the appellant has filed the present appeal.
WRIT PETITION (CIVIL) NO. 1177 OF 2020 M/ S MONNET ISPAT & ENERGY LIMITED AND ANOTHER VS. STATE OF ODISHA AND ANOTHER
26. The petitioner Company is a Corporate Debtor in respect of which CIRP proceedings commenced in July 2017 and ended in July Page 12 of 23 Downloaded on : Sat Sep 16 23:51:59 IST 2023 NEUTRAL CITATION C/SCA/7120/2021 JUDGMENT DATED: 02/08/2023 undefined 2018, when NCLT approved the Resolution Plan submitted by a Consortium of Aion Investment Private Limited and JSW Steel Limited ("Aion JSW" for short). Prior to approval by NCLT, CoC had granted approval to the said Resolution Plan by a voting majority of 98.97%. It is the contention of the petitioner, that in accordance with the provisions of I&B Code, RP had made a public announcement thereby, inviting claims from Creditors. Contending, that the demand notices issued by the respondents for recovery of Service Tax towards Royalty, District Mineral Foundation ("DMF" for short) and National Mineral Exploration Trust ("NMET" for short) against the iron ore purchased by the petitioner Company are contrary to the law laid down by this Court in the case of Committee of Creditors of Essar Steel India Limited Through Authorized Signatory v. Satish Kumar Gupta and Others1, the petitioner has directly approached this Court by filing a writ petition under Article 32 of the Constitution of India.
CIVIL APPEALS ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NOS.71477150 OF 2020 [ELECTROSTEEL STEELS LIMITED, BOKARO, JHARKHAND VS. STATE OF JHARKHAND AND OTHERS]
27. The appellant is a Corporate Debtor in respect of which the proceedings under Section 7 were initiated by the SBI. Vide order dated 21.7.2017 of NCLT, the application filed by SBI Page 13 of 23 Downloaded on : Sat Sep 16 23:51:59 IST 2023 NEUTRAL CITATION C/SCA/7120/2021 JUDGMENT DATED: 02/08/2023 undefined was admitted and Mr. Dhaivat Anjaria was 1 (2020) 8 SCC 531 appointed as Interim Resolution Professional (IRP). In its meeting dated 21.8.2017, CoC approved the appointment of IRP as RP. In response to the invitation for submission of resolution plans, four applicants had submitted their Resolution Plans. CoC had approved the Resolution Plan of Vedanta Limited by 100% voting share.
28. NCLT vide order dated 17.4.2018 approved the Resolution Plan of Vedanta Limited. The appeal being Company Appeal (AT) (Insolvency) No. 175/2018 filed by one Renaissance Steel India Private Limited challenging the order of NCLT came to be dismissed by NCLAT vide order dated 10.8.2018. Challenging the notices issued by the respondent State Authorities and the order of SBI asking it to pay an amount of Rs.37,41,41,602/ on account of tax penalty due under the Jharkhand VAT Act for the period 201112 and 2012 13, the appellant approached the High Court of Jharkhand. The appellant had also challenged the letter dated 22.11.2019 issued by State Tax Officer, Bokaro to deposit the amount of Rs.75,57,000/.
29. As in the other matters, it is contended by the appellant, that in view of Section 31 of I&B Code, since the claim made by the respondent was not a part of the Resolution Plan, it would get extinguished on the Resolution Plan being approved by NCLT. The said writ petition came Page 14 of 23 Downloaded on : Sat Sep 16 23:51:59 IST 2023 NEUTRAL CITATION C/SCA/7120/2021 JUDGMENT DATED: 02/08/2023 undefined to be rejected by the High Court on the ground, that the petitioner had no locus and that the Resolution Plan was not binding on the State Government since it had not participated in the CIRP proceedings.
39. Dr. Singhvi, learned Senior Counsel appearing on behalf of the appellantUltraTech Nathdwara Cement Limited submitted, that a conjoint reading of subsection (10) of Section 3 and subsections (20) and (21) of Section 5 would show, that even if there was no amendment to Section 31 of I&B Code by the 2019 Amendment, still the Central Government and any State Government or the local authorities were bound by the same and any statutory dues owed to them by the Corporate Debtor, which were not included in the resolution plan, shall stand extinguished.
40. Dr. Singhvi submitted, that the 2019 Amendment, which amends Section 31 is clarificatory in nature and only declares and clarifies the position of law, which has already been in existence i.e. the Central Government, any State Government and local authorities are bound by the CIRP. He submitted, that this Court in the cases of State Bank of India vs. V. Ramakrishnan and Another7 and B.K. Educational Services Private Limited v. Parag Gupta and Associates8 has held the amendment to certain provisions of the I&B Code to be clarificatory in nature.
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41. The learned Senior Counsel submitted, that upon perusal of the provisions of the I&B Code, it is clear, that once NCLT grants approval to the Resolution Plan, all proceedings pending insofar as the Corporate Debtor is concerned, which are not included in the Resolution Plan shall stand automatically stayed. He submitted, that perusal of the chart pertaining to the dues of the respondents, clearly reveal that all of the said dues are prior to the admission of the Company Petition filed under Section 7 of I&B Code and therefore, the respondents are not entitled to continue the proceedings in respect thereof since the same do not form part of the approved resolution plan.
42. He submitted, that the orders passed by NCLAT were challenged before this Court by the Revenue Authorities of the Rajasthan State as well as the Commissioner of Central Excise (GST), Jodhpur and this Court had refused to interfere with the order passed by NCLAT. It is submitted, that in this background, the authorities are totally unjustified in continuing the proceedings, which are undisputedly with respect to the dues prior to admission of the application under Section 7 of I&B Code, only on the ground, that there is no specific stay order passed by NCLT.
42. He submitted, that the High Court has erred in refusing to entertain the writ petition of the appellant solely on the ground, that an alternative remedy by way of a second appeal Page 16 of 23 Downloaded on : Sat Sep 16 23:51:59 IST 2023 NEUTRAL CITATION C/SCA/7120/2021 JUDGMENT DATED: 02/08/2023 undefined was available to the appellant. He submitted, that in catena of judgments, this Court has held, that non exercise of jurisdiction under Article 226, despite availability of alternative remedy is a rule of selfrestraint and in the appropriate areas carved out by this Court, entertaining a petition under Article 226, despite availability of alternative remedy, would be permissible. He submitted, that applying the said principle, the proceedings before the authority since stand prohibited in view of the provisions of the I&B Code, the High Court erred in refusing to entertain the petition.
43. The learned Senior Counsel further submitted, that despite the pendency of the present appeal, the Joint Commissioner, Commercial Tax, Ghaziabad has passed an Assessment Order dated 2.2.2021 for the period prior to admission of Section 7 petition, as such the appellant has filed IA No.26255/2021 challenging the said assessment order.
44. Dr. Singhvi further submitted, that though the respondent authorities were aware of the Resolution Proceedings, they had failed to submit any claim, in response to the public notices issued by RP."
5.2 Paras 64 and 65 read as under:
Page 17 of 23 Downloaded on : Sat Sep 16 23:51:59 IST 2023NEUTRAL CITATION C/SCA/7120/2021 JUDGMENT DATED: 02/08/2023 undefined "64. It could thus be seen, that the legislature has given paramount importance to the commercial wisdom of CoC and the scope of judicial review by Adjudicating Authority is limited to the extent provided under Section 31 of I&B Code and of the Appellate Authority is limited to the extent provided under subsection (3) of Section 61 of the I&B Code, is no more res integra.
65. Bare reading of Section 31 of the I&B Code would also make it abundantly clear, that once the resolution plan is approved by the Adjudicating Authority, after it is satisfied, that the resolution plan as approved by CoC meets the requirements as referred to in subsection (2) of Section 30, it shall be binding on the Corporate Debtor and its employees, members, creditors, guarantors and other stakeholders.
Such a provision is necessitated since one of the dominant purposes of the I&B Code is, revival of the Corporate Debtor and to make it a running concern."
5.3 Considering the amendment to Section 31 of the IBC and referring to the speech of the Finance Minister, the Supreme Court in Paras 79 and 80 observed as under:
"79. In the Rajya Sabha debates, on 29.7.2019, when the Bill for amending I&B Code came up for discussion, there were certain issues raised Page 18 of 23 Downloaded on : Sat Sep 16 23:51:59 IST 2023 NEUTRAL CITATION C/SCA/7120/2021 JUDGMENT DATED: 02/08/2023 undefined by certain Members. While replying to the issues raised by certain Members, the Hon'ble Finance Minister stated thus:
"IBC has actually an overriding effect. For instance, you asked whether IBC will override SEBI. Section 238 provides that IBC will prevail in case of inconsistency between two laws. Actually, Indian courts will have to decide, in specific cases, depending upon the material before them, but largely, yes, it is IBC. [...] There is also this question about indemnity for successful resolution applicant. The amendment now is clearly making it binding on the Government. It is one of the ways in which we are providing that. The Government will not raise any further claim. The Government will not make any further claim after resolution plan is approved. So, that is going to be a major, major sense of assurance for the people who are using the resolution plan.
Criminal matters alone would be proceeded against individuals and not company. There will be no criminal proceedings against successful resolution applicant. There will be no criminal proceedings against successful resolution applicant for fraud by previous promoters. So, I hope that is absolutely clear. I would want all the hon. Members to recognize this message and communicate further that this Code, therefore, gives that Page 19 of 23 Downloaded on : Sat Sep 16 23:51:59 IST 2023 NEUTRAL CITATION C/SCA/7120/2021 JUDGMENT DATED: 02/08/2023 undefined comfort to all new bidders. So now, they need not be scared that the taxman will come after them for the faults of the earlier promoters. No. Once the resolution plan is accepted, the earlier promoters will be dealt with as individuals for their criminality but not the new bidder who is trying to restore the company. So, that is very clear .................
(emphasis supplied)"
80. It could thus be seen, that in the speech the Hon'ble Finance Minister has categorically stated, that Section 238 provides that I&B Code will prevail in case of inconsistency between two laws. She also stated, that there was question about indemnity for successful resolution applicant and that the amendment was clearly making it binding on the Government. She stated, that the Government will not make any further claim after resolution plan is approved. So, that is going to be a major sense of assurance for the people who are using the resolution plan. She has categorically stated, that she would want all the Hon'ble Members to recognize this message and communicate further that I&B Code gives that comfort to all new bidders. They need not be scared that the taxman will come after them for the faults of the earlier promoters. She further states, that once the resolution plan is accepted, the earlier promoters will be dealt with as individuals for their criminality but not Page 20 of 23 Downloaded on : Sat Sep 16 23:51:59 IST 2023 NEUTRAL CITATION C/SCA/7120/2021 JUDGMENT DATED: 02/08/2023 undefined the new bidder who is trying to restore the company."
5.4 In light of the above, the Supreme Court in Para 84 held as under:
"84. 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, 12 (2009) 12 SCC 209 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."
5.5 In other words, as per the position of law declared in the case of Ghanshyam Mishra (supra), in case of all such debts owed to the Central Government, any State Page 21 of 23 Downloaded on : Sat Sep 16 23:51:59 IST 2023 NEUTRAL CITATION C/SCA/7120/2021 JUDGMENT DATED: 02/08/2023 undefined Government or any local authority including tax authority, once a resolution plan is approved all such claims etc which were not a part of the resolution process shall stand extinguished. The conclusions of the Supreme Court in the case of Ghanshyam Mishra (supra) read as under:
"102. In the result, we answer the questions framed by us as under:
102.1 That once a resolution plan is duly approved by the Adjudicating Authority under sub section (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;
102.2 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;Page 22 of 23 Downloaded on : Sat Sep 16 23:51:59 IST 2023
NEUTRAL CITATION C/SCA/7120/2021 JUDGMENT DATED: 02/08/2023 undefined 102.3 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."
6. In light of the law laid down therefore the prayers made in para 37 of the petition deserves to be granted and the impugned assessment orders, assessment notices and demand notices dated 14.2.2019, 16.2.2019, 20.07.2020, 18.07.2020 and orders dated 22.1.2021 are quashed and set aside. Petition is accordingly allowed.
Rule is made absolute with no order as to costs.
(BIREN VAISHNAV, J) (D. M. DESAI,J) DIVYA Page 23 of 23 Downloaded on : Sat Sep 16 23:51:59 IST 2023