The Bombay High Court has quashed the GST Demand order against corporate debtor.
The bench of Justice M.S. Sonak and Justice Jitendra Jain have observed that the officer has not considered the applicability of the judgment of the Supreme Court in Ghanshyam Mishras case and Bombay High Court in Murli Industries case.
The Supreme Court in the case of Ghanashyam Mishra And Sons Private Limited Vs Edelweiss Asset Reconstruction Company Limited has held that 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.
The Bombay High Court in the case of Murli Industries versus vs. Assistant Commissioner of Income Tax & ors. the Income Tax Department is not entitled to issue notice against the Corporate Debtor for unpaid tax claims after the approval of the resolution plan by the adjudicating authority.
The petitioner is a successor. The wound up company went into liquidation. RP was appointed. NCLT passed an order approving the COC report. The petitioner company acquired the wound up entity. A GST audit was sought to be conducted on the company which did not exist. A show cause notice was issued. Writ petition was filed challenging such notice on the ground that notice was without jurisdiction as the GST authorities could not make a claim against a company which has been wound up. In the mean time, order came to be passed. Order was also challenged.
The court held that the order is not entirely clear whether the Petitioner filed no reply or whether the reply filed was not found to be satisfactory. In any event, stating that the reply was unsatisfactory does not make a reasoned order. To that extent, there is a violation of natural justice because the duty to give reasons is also one of the facets of natural justice.
The court quashed the order without relegating the Petitioner to avail of the alternate remedy given in the peculiar facts and the breach of natural justice. The matter was remanded to the Respondent department. The Petitioner, if so wishes, should file a detailed response within two weeks from today, raising all permissible contentions and furnishing copies of all relevant documents and decisions.
Case Details
Case Title: Prestige Mulund Realty Private Limited v/s Union of India
Case No.: WRIT PETITION NO. 4548 OF 2024
Date: 25th NOVEMBER, 2024
Counsel For Petitioner: Bharat Raichandani, Aman Mishra, UBR Legal
Counsel For Respondent: Jyoti Chavan
