Transferee can utilise accrued money credit after factory takeover when assets and liabilities are assumed.

Money credit earned by the original manufacturer before takeover remained available for utilisation by the transferee where the transferee had taken over the factory together with its assets and liabilities. The transferee was treated as stepping into the shoes of the transferor for the purpose of using the accrued credit, so the objection based on the takeover failed. The order denying credit could not be sustained, and utilisation of the earned credit was upheld.

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Issues: Availability of money credit under Rule 57K after takeover of the factory and the effect of the transferee stepping into the shoes of the transferor.

Analysis: The credit had been earned by the original manufacturer before the takeover. The earlier decision on the same transaction held that the transferee had taken over both the assets and the liabilities of the transferor and, therefore, stood in the place of the original manufacturer for utilisation of the accrued credit. Applying that reasoning, the money credit remained available for utilisation by the transferee after the takeover.

Conclusion: The credit was available for utilisation by the transferee, and the objection based on the takeover failed.

Final Conclusion: The order denying the credit could not be sustained, and the matter stood concluded in favour of utilisation of the earned credit.

Ratio Decidendi: Where a transferee takes over the factory together with its assets and liabilities, accrued credit available to the transferor may be utilised by the transferee.

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