TaxTMI 
TaxTMI 
2021 (7) TMI 462
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....4 of 2007 as the same would not survive in light of the sanctioning of the Final Resolution Plan dated 25.05.2018; and (C) This Hon'ble Court may be pleased to grant such other and further reliefs as may be deemed just and expedient." 2. On 19.10.2021, this Court passed the following order; "One last opportunity is given to Mr. Vyas to obtain the necessary instructions in the matter, more particularly, whether the appeal filed by The Commissioner of Customs (Preventive) has stood abated in view of certain developments, as pointed out by Mr. Gaurav Mehta, the learned counsel appearing for Singhi & Co for the applicant. Post this matter on 01.02.2021. On the next date of hearing, the main matter I.e. Tax Appeal No. 754 of 2007 shall also be notified on board. We are saying so because in the event if the department is of the view that the Appeal has not abated or has not become infructuous, then the Court may proceed with the hearing of the Appeal itself being of the year 2007." 3. Mr. Joshi, the learned senior standing counsel appearing for Singhi & Co. submits that the Tax Appeal No.754 of 2007 filed by the Revenue would not survive i....
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....or the Department to proceed with the matter on merits, the same has been taken up for hearing accordingly. 3. The applicant herein is a wholly owned subsidiary of the Ultra Tech Cement Ltd. ("Ultra Tech" for short) and forms a part of the Aditya Birla Group. The erstwhile M/s. Binani Cement Limited (hereinafter referred to as "the Corporate Debtor") came to be acquired by the Ultra Tech by way of an approved resolution plan dated 25th May, 2018 (hereafter referred to as "the Final Resolution Plan") submitted by it in the insolvency proceedings that were initiated against the Corporate Debtor before the National Company Law Tribunal Bench at Kolkata (hereinafter referred to as "the Adjudicating Authority") under the provisions of the insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "the Code"). Pursuant to the aforesaid acquisition, the Ultra Tech took over the management of the Corporate Debtor with effect from 20th November, 2018 and the name of the Corporate Debtor was changed to the Ultra Tech Nathdwara Cement Limited, i.e, the applicant herein with effect from 13th December, 2018. 4. The Tax Appeal No.754 of 2007 arises from the order passed by the CESTAT....
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....hi & Company appearing for the applicant and Mr. Dhaval Vyas, the learned senior standing counsel appearing for the Department. 8. The short point for our consideration is whether the Tax Appeal No.754 of 2007 would survive in light of the sanctioning of the Final Resolution Plan dated 25.05.2018. 9. Submissions on behalf of the applicant:- "The Applicant submits that a resolution plan once approved, is binding on all the creditors and stakeholders, including the Central Government by virtue of Section 31(1) of the Code. The Respondent herein (original Appellant) ("the Appellant") would be an Operational Creditor within the meaning of Section 5(20) read with Section 5(21) of the Code and its entitlement would stand restricted to the treatment accorded under the approved resolution plan. The Approval Order was challenged before Hon'ble the Supreme Court of India in in the Civil Appeal Nos. 630 - 634 of 2019, raising the same contentions that are raised by the Appellant in the present application. The following questions of law, amongst others, were raised in the memo of Appeal: "3. ...... (iii) Whether the Hon'ble NCLAT was justifie....
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....elhi. Accordingly, the appeals are dismissed." In the aforesaid facts and circumstances, the issues raised by the Appellant in this Application stood covered. Civil Appeal Nos. 630 - 634 of 2019 are statutory appeals and the order passed therein will lead to merger of the Approval Order and operates as res judicata. 6. During the course of hearing of this Application, the Revenue contended that (a) the Approved Plan cannot bind the Appellant since Section 31(1) of the Code, which was amended on 5.8.2019 w.e.f. 16.8.2019is prospective, (b) the Appellant cannot be said to be a contingent creditor since, in the facts of the present case, an assessment order was passed and (c) the claim of the Appellant will survive in light of the Judgment reported in 2020 SCC Online Jhar 454 in the matter of Electrosteel Steels Limited v/s State of Jharkhand. 7. It is submitted that all the above referred contentions are misconceived for the following reasons: I. Section 31(1) of the Code amended w.e.f. 16.8.2019 is prospective and cannot be applied to the Approved Plan: (a) Even before 16.8.2019 (i.e. prior to effective date of the amendment) a r....
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....e Code. In the fact of the present case, the claim of the Department would be, at best, a Contingent Liability, which term is defined in Clause 1.7.14 of the Approved Plan (Page no. 116) as under: 1.7.14 "Contingent Liability(ies)" means: (a) Liabilities that be incurred by the Corporate Debtor depending on the outcome of a pending Litigation, lawsuit, claim or demand relating to the period prior to the Transfer Date; (b) Any Liability towards transfer charges, stamp duty or registration fee arising in relation to corporate reorganizations or transfers of immovable property from predecessors - in-title to the Corporate Debtor relating to the period prior to the Transfer Date; and (c) Any liability for tax, interest or penalty relating to the period prior to the Transfer Date for which the assessments have not been completed. It is clarified that Contingent Liability(ies) do not include any guarantee issued by the Corporate Debtor. The details of Contingent Liabilities stipulated in (a) above as per the Information Memorandum and VDR is provided in Part E of Schedule 2 (read with Annexure 4 (Details of Contingent Liabilities) of this Reso....
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....pertain to claims submitted to and verified by the Resolution Professional. Admittedly, the Appellant did not submit any claim to the Resolution Professional at the relevant time. (e) Under Clause 6.2.3.6 of the Resolution Plan (Page no. 204), all contingent liabilities stand fully discharged without any payment in terms of the Resolution Plan. (f0 Under Clause 6.2.4 of the Resolution Plan (Page no. 204), no amount either by way of principal or interest or penal interest or damages or any other amount is to be paid to any creditors in respect of any other liability not dealt with under the Resolution Plan. Further Clause 6.5.2.13 of the Approved Plan reads as under: "6.5.2.13 Pursuant to this Resolution Plan, all Litigations instituted against the Corporate Debtor, initiated or arising and pending before the Transfer Date shall stand withdrawn, without any further act, instrument or deed. Any appeals or challenges in respect of such Litigations shall also stand withdrawn, without any further act, instrument or deed. It is clarified that all Litigations instituted by the Corporate Debtor, initiated or arising and pending before the Transfer Date shall cont....
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.... the IRP or the Resolution Professional ("RP"), as the case may be before the last date mentioned in the advertisement for submission of claims. By virtue of Regulation 12(2) of the CIRP Regulations, any creditor who omits to file its claim before the 90th day of the initiation of CIRP. The provisions of Regulation 6 and 12(2) of the CIRP Regulations read as under: "6. Public announcement. (1)An insolvency professional shall make a public announcement immediately on his appointment as an interim resolution professional. Explanation: 'Immediately' means not later than three days from the date of his appointment. (2) The public announcement referred to in sub-regulation (1) shall: (a) be in Form A of the Schedule; (b) be published- (I) in one English and one regional language newspaper with wide circulation at the location of the registered office and principal office, if any, of the corporate debtor and any other location where in the opinion of the interim resolution professional, the corporate debtor conducts material business operations; (ii) on the website, if any, of the corporate debtor; and (iii) on the w....
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....section 30, it shall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors, [including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed], guarantors and other stakeholders involved in the resolution plan;" The highlighted part of the section has been inserted has by Insolvency and Bankruptcy Code (Amendment) Act, 2019 (26 of 2019) dated 05.08.2019 Wef. 16.08.2019 vide SO 2953(E), dated 16.08.2019. The amendment vide IBC (Amendment) Act, 2019, has been promulgated to make the approved resolution plan binding on the Government Authorities in relation to the statutory dues. It is pursuant to this amendment that the rights of the Government Authorities for statutory dues were affected and such right was made subject to the approved resolution plan. The said amendment was made effective from 16.08.2019, which is prospective in nature, and no express retrospective effect was given to the said amendment. The said amendment takes away a substanti....
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....in respect of such claims; (e) particulars of a debt due from or to the corporate debtor with respect to related parties; (f) details of guarantees that have been given in relation to the debts of the corporate debtor by other persons, specifying which of the guarantors is a related party; (g) the names and addresses of the members or partners holding at least one per cent stake in the corporate debtor along with the size of stake; (h) details of all material litigation and an ongoing investigation or proceeding initiated by Government and statutory authorities; (I) the number of workers and employees and liabilities of the corporate debtor towards them; (j)-(k)*** (l) other information, which the resolution professional deems relevant to the committee. The final assessment and present litigation was on record of M/s Binani inasmuch as the resolution professional shall have provided the information of the final assessment and present litigation to the resolution applicant as also ascertained by the applicant from the information memorandum and VDR (Clause 4.2.2 @ 190), thus taking in fold such liability the Res....
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....licant cannot suddenly by faced with "undecided" claims after the resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which throw into uncertainty amounts payable by a prospective resolution applicant who would successfully take over the business of the corporate debtor. All claims must be submitted to and decided by the resolution professional so that a prospective resolution applicant knows exactly what is to be paid in order that it may then take over and run the business of the corporate debtor. This the successful resolution applicant does on a fresh slate as has been pointed out by us hereinabove......" (Emphasis Supplied) 12. In our opinion, the judgment of the Jharkhand High Court in the case of Essar Steel Limited (Supra) is of no avail to the Department for the following reasons; (i) In Electrosteel (supra) the matter pertained to the amount recovered by an assessee from its customers, which were not considered by the Resolution Professional while verifying the claims. In the facts of the present case since (a) since there was a final assessment, the Corporate Debtor would necessarily have paid the duty; (b) th....