2021 (9) TMI 368 - HC - VAT and Sales Tax

Court allows name substitution due to company change & orders Form-C issuance after tax challenge

The court allowed the petitioner's name substitution due to a company name change. The non-issuance of Form-C was challenged, citing a tax liability ... Seeking substitution of the name of the petitioner - issuance of certificate of incorporation by the Registrar of Companies, Ministry of Corporate Affairs, Government of India pursuant to the change in the name - petitioner submits that the application may be allowed in view of the change in name of the original petitioner - HELD THAT:- Having regard to the declaration of law by the Apex Court in GHANASHYAM MISHRA AND SONS PRIVATE LIMITED THROUGH THE AUTHORIZED SIGNATORY VERSUS EDELWEISS ASSET RECONSTRUCTION COMPANY LIMITED THROUGH THE DIRECTOR & ORS. [2021 (4) TMI 613 - SUPREME COURT], all dues including the statutory dues owed to the Central Government, any State Government or any local authorities, 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 adjudication authority grants its approval under Section 31 of the Code would be continued. Let the matter appear on 06.09.2021. Affidavit, if any be filed by the parties latest by 02.09.2021. Issues:1. Substitution of petitioner's name in view of the change in name of the company.2. Non-issuance of Form-C for a specific period and quashing of the order rejecting the application.3. Existing tax liability of the petitioner under the JVAT Act and CST Act.4. Interpretation of Section 31 of the I.B. Code regarding resolution plan approval and statutory dues.5. Implications of the Apex Court's judgment on the petitioner's case.6. Compliance with the Apex Court's decision and issuance of Form-C to the petitioner.Analysis:1. The petitioner sought substitution of its name from M/s Electrosteel Steels Limited to M/s ESL Steel Limited due to a change in the company's name. The court allowed the substitution, and the new name was updated in the records and relevant documents.2. The petitioner approached the court regarding the non-issuance of Form-C for a specific period and the rejection of their application. The respondents had cited a significant tax liability of over Rs. 81 crores, leading to the rejection. The petitioner argued that similar circumstances had been treated differently in the past, and no hearing was provided before the rejection.3. The petitioner's existing tax liability under the JVAT Act and CST Act was a subject of previous writ petitions. The court had ruled that the petitioner was liable to pay the dues despite an approved resolution plan, as per Section 31 of the I.B. Code. The Apex Court later clarified the binding nature of resolution plans on creditors and extinguishment of claims not part of the plan.4. The interpretation of Section 31 of the I.B. Code was crucial in determining the resolution plan's impact on statutory dues. The Apex Court's judgment clarified that all dues not included in the plan would be extinguished once approved, preventing further proceedings for such dues.5. The Apex Court's judgment had a direct impact on the petitioner's case, leading to the setting aside of the previous judgment denying the issuance of Form-C. The court declared that the respondents were not entitled to recover any debts accruing before a specific date, aligning with the Apex Court's decision.6. In response to the Apex Court's judgment, the respondents reassessed the petitioner's case and committed to issuing the required Form-C once the evaluation process was completed. Both parties agreed to cooperate, and the court scheduled a future appearance to monitor compliance and address any remaining grievances effectively.