Statutory pre-deposit refund with interest follows once resolution plan extinguishes excess tax liability and appeals become infructuous.

A mandatory statutory pre-deposit made for filing tax appeals was refundable with interest once the corporate debtor's liabilities were extinguished under an approved resolution plan. Because the insolvency resolution process confined the department's claim to the admitted amount, any pre-resolution dues beyond that liability stood extinguished and the appeals became infructuous. The department could not retain sums received in excess of the crystallised liability. Refund provisions under the Rajasthan Value Added Tax Act and the Rules supported reimbursement of the excess amount, together with interest where the refund had become due; rejection of the refund claim was therefore unsustainable.

---

---

Issues: (i) Whether the amount deposited as mandatory statutory pre-deposit while filing the tax appeals was refundable with interest after the corporate debtor's liabilities stood extinguished under the approved resolution plan.

Analysis: The pre-deposit was made as a condition for entertainment of the appeals under Section 82(3) of the Rajasthan Value Added Tax Act, 2003. Once the insolvency resolution process culminated in an approved resolution plan, the department's claim stood confined to the amount admitted in the resolution process and all pre-resolution dues beyond that amount stood extinguished. The appellate disputes therefore became infructuous, and the Department could not retain sums received in excess of the liability crystallised under the resolution plan. The refund provisions under Section 53 of the Rajasthan Value Added Tax Act, 2003 and Rule 27 of the Rajasthan Value Added Tax Rules, 2006 supported reimbursement of excess amounts, with interest where refund became due.

Conclusion: The pre-deposit amount was refundable with interest, and the rejection of the refund claim was unsustainable.

---