Rajasthan HC quashes VAT Demand against Corporate Debtor: Directs VAT Dept to Refund Deposit ‘Paid

A division bench of the Rajasthan High Court comprising Justice Sandeep Mehta and Justice Vinod Kumar Bharwani has quashed the demand of VAT against the Corporate Debtor and directed the department to refund the mandatory pre-deposit paid “under protest.”

The bench was considering a few petitions seeking a refund of the pre-deposits made by way of mandatory statutory obligation along with the appeals if any, filed under the tax regime and other amounts deposited under protest with interest.

The division bench observed that controversy regarding the fate of all the outstanding dues of the Corporate Debtor M/s. Binani Cement Limited has been settled by the Division Bench of the Court vide judgment in Ultra-Tech Nathdwara Cement Ltd. vs. Union of India & Ors.

The Court held that the issue regarding the entitlement of the petitioner M/s. UltraTech being the Successful Resolution Applicant to receive a refund of the amounts deposited with the Commercial Taxes Department by way of mandatory statutory has also been concluded by this Court vide order dated 18.04.2022 passed in a bunch of Sales Tax References/Revisions led by in the case of M/s. Ultratech Nathdwara Cement Limited vs. The Assistant Commissioner, Commercial Tax Department & Anr, wherein it was held that the respondents are not entitled to recover any claims or claim any debts owed to them by the corporate debtor accruing prior to transfer date.

Allowing the Revisions/ Sales Tax References, the Court held that the demands raised by the Commercial Taxes Department against the Corporate Debtor M/s. Binani Cement Limited except to the extent admitted by NCLAT is declared to be infructuous/is quashed/struck down.

Further, the Court directed that the amounts deposited by the Corporate Debtor under protest and by way of pre-deposit as a mandatory statutory obligation while filing the appeals shall be refunded to the petitioner M/s. UltraTech Nathdwara Cement Limited is the Successful Resolution Applicant with applicable interest as per law within a period of 60 days.