"A.F.R. Court No. - 5 Case :- SALES/TRADE TAX REVISION No. - 188 of 2019 Applicant :- M/S Ultratech Nathdwara Cement Limited Opposite Party :- Commissioner Of Commercial Taxes Counsel for Applicant :- Nishant Mishra Counsel for Opposite Party :- C.S.C. Hon'ble Ashok Kumar,J. Heard Sri Nishant Mishra assisted by Sri Tanmay Sadh, learned counsel for the revisionist and Sri A.C. Tripathi, learned Standing Counsel for the sole respondent. This revision has been filed under Section 58 of the U.P. Value Added Tax Act, 2008 (hereinafter referred to as 'the Act') for the assessment year 2015-16 under the U.P. VAT Act. The applicant has challenged the order passed by the Commercial Tax Tribunal, Bench-II, Ghaziabad dated 14.05.2019 by which the Tribunal has granted conditional stay to the extent of 80% of the disputed amount of tax during pendency of first appeal before the first appellate authority. The claim of the applicant is that, in fact, the applicant is not at all liable to pay any amount in view of overriding provisions of Insolvency & Bankruptcy Code, 2016. The applicant M/s UltraTech Nathdwara Cement Limited is a Company having its registered office at Block D, 4th Floor, 22 Camac Street, Kolkata. M/s Binani Cement Ltd. was acquired by UltraTech Cement Limited vide Revised Resolution Plan dated 28.05.2018, which was approved by National Company Law Appellate Tribunal, New Delhi (hereinafter referred to as the NCLAT) vide order dated 14.11.2018, which has been affirmed by Hon'ble Supreme Court vide orders dated 19.11.2018 and 08.01.2019. The Binani Cement Ltd. (hereinafter referred to as the 'BCL') was a Company engaged in cement manufacturing business. BCL was having its manufacturing units in the State of Rajasthan and branches all over the country. Within the State of U.P., BCL was having principal place of business at Ghaziabad, which was also the place of business of C & F Agent of BCL i.e. M/s Shree Jee Agencies. BCL was also having branches of different cities, from where cement received on stock transfer basis was sold inside the State of U.P., for which BCL was duly registered under the provisions of U.P. VAT Act, 2008 and Central Sales Tax Act, 1956. It is contended by learned counsel for the applicant that due to some unavoidable reasons, BCL was compelled to close down its business activities and all the stock imported in the month of March, 2015 was sold in the same month, and therefore, during the period 2015-16, BCL was neither having any opening stock of goods nor any goods were received on stock transfer basis, therefore BCL was not having any intention carry business in the year in question and therefore surrendered its Registration Certificate with the office of the assessing authority which includes the intimation of the closure of the business with effect from 01.04.2015. Learned counsel for the applicant submits that on account of closure of business activities w.e.f. 01.04.2015, BCL also terminated its agreement with its C & F agent i.e. M/s Shree Jee Agencies, 53 Ramte Ram Road, Ghaziabad. Thus, with effect from 01.04.2015, BCL was neither conducting any business activity within the State of U.P. nor was having any relation with its C & F agent. Admittedly, on 23.09.2015, S.I.B authorities surveyed the principal place of business of BCL and during course of survey one person namely Raj Kumar Sharma informed the surveying authorities that no business activities are conducted by M/s BCL on account of closure of the business. It is admitted fact that certain loose papers were resumed by the survey authorities which includes the loading slip used by the ex- C & F Agent, claimed that the same were used by him for his personal business transactions. Since the BCL was unable to repay it's debts, one of the financial creditor i.e. Bank of Baroda filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process, before National Company Law Tribunal, Kolkata (in short NCLT). The said petition was admitted by NCLT, Kolkata and during pendency of the said petition and insolvency process, the present applicant as well as one M/s Rajputana Properties Pvt. Ltd. submitted their resolution plans before the Resolution Professional for Consideration of COC. The NCLT, Kolkata vide order dated 02.05.2018 has held that the resolution plan submitted by the other party M/s Rajputana Properties Pvt. Ltd. was discriminatory and contrary to the scheme of Code. Hence the NCLT directed the COC to consider the other resolution plans including the plan submitted by the present applicant. In between assessing authority has issued a show cause notice directed the BCL to produce the books of account for the purpose of assessment and also required the reply to the various queries made in the show cause notice. The BCL submitted its reply on each and every queries made in the notice. BCL has also informed the assessing authority regarding the moratorium order passed by the NCLT, Kolkata. However, the order dated 02.05.2018 passed by the NCLT, Kolkata was assailed before the Hon'ble Supreme Court and vide the order dated 02.07.2018, the Supreme Court remitted the matter to the National Company Law Appellate Authority, New Delhi (NCLAT). By the order of the Supreme Court, the insolvency petition has been transferred from NCLT, Kolkata to NCLAT, New Delhi. Pursuant to the order of the Supreme Court, NCLAT passed an order dated 14.11.2018 by which it has approved the revised resolution plan submitted by the present applicant and has held that the same will be binding on the corporate debtor (BCL), its employee, members, creditors, guarantors and other stake holders involved in the Resolution Plan. The order of NCLAT was challenged by the other party namely M/s Rajputana Properties before the Apex Court. However, the appeal filed by the M/s Rajputana Properties was dismissed vide the order dated 19.11.2018. The review petition filed by the M/s Rajputana Properties was also dismissed by the Apex Court vide the order dated 08.01.2019. This fact goes to show that the order passed by the NCLAT dated 14.11.2018 approving the Revised Resolution Plan submitted by the present applicant, has become final. On an application moved by M/s UltraTech Cement Ltd., the name of the company was changed before the GST authorities and the registration certificate which was initially issued in the name of BCL was appropriately amended with the same GSTIN No.09AABCB3087C2ZW. It is contended by learned counsel for the applicant that BCL became a wholly owned subsidiary of UltraTech Cement Limited and pursuant to the payment of resolution amount, all litigations instituted against the BCL initiated or arising and pending before the transfer date, shall stand withdrawn. Counsel for the applicant, therefore, submits that it was indicated before the authority below particularly before the assessing authority that in view of above no amount is payable for any transaction prior to transfer date and therefore, it was requested that the assessment proceeding for the present assessment year 2015-16 against M/s BCL may be closed. Learned counsel for the applicant submits that specific objection was filed by the applicant before the assessing authority bringing on record the entire facts and prayed that no assessment can be made and no demand therefore can be created in terms of the resolution plan, which has overriding effect in view of the provision of the Code even then the assessing authority has passed the assessment order dated 23.02.2019 by which he has created huge illegal demand of tax of Rs.2,32,60,000/-. The order of the assessment dated 23.02.2019 has been challenged by the applicant under Section 55 of VAT Act before the first appellate authority. An application under Sub-Section (6) of Section 55 was moved before the first appellate authority for stay of the realisation of the impugned demand. The first appellate authority while entertaining and deciding the interim application filed has passed the following order: \"1- शश्री अमररेश तत्रिपपाठश्री ज्वपाइन्ट कतमश्नर (कपारपपोररेट सतक रल/ जपोन प्रथम वपातणिज्य कपा गपाजजयपाबपाद दपारपा वरर 2015-16 मम ववैट अजधितनयम ककी धिपारपा 28(2) 11 प्रपान्तश्रीय क रे अन्तगरत गतठत आदरेश तदनपानांक 23.02.2019 क रे तवरुद्ध यह स्थगन प्रपाथरनपा पत्रि प्रस्ततुत तकयपा गयपा हवै जजसमम तववपातदत ककी धिनरपातश रुपयरे 23260000-00 हवै। 2- अपश्रीलकतपार ककी ओर सरे तवदपान अजधिवकपा शश्री प्रशपान्त तमशपा मरेररे समक्ष उपसस्थत हहए उनक रे दपारपा बनपायपा तक फमर ककी आजथरक सस्थतत खरपाब हपोनरे क रे कपारणि शत प्रततशत स्थगन प्रदपान करनरे ककी प्रपाथरनपा ककी गई। 3- मरेररे दपारपा पत्रिपावलश्री कपा अवलपोकन तकयपा गयपा। अततः तवचपारपाधिश्रीन प्रकरणि मम तववपातदत तथ्ययों कपो दरेखतरे हहए क तुणि दपोर पर तटप्पणिश्री तकयरे तबनपा उपरपोक तथ्ययों क रे प्रकपाश मम वरर 2015-16 मम ववैट अजधितनयम ककी धिपारपा 28(2) प्रपान्तश्रीय मम तववपातदत कर ककी धिनरपातश रुपयरे 23360000-00 कपा 50% स्टरे अपश्रील तनणिरय तक क रे जलए स्थतगत तकयपा जपातपा हवै। उपरपोक स्थगन आदरेश ववैट अजधितनयम ककी धिपारपा 55(6) क रे प्रपातवधिपानयों क रे अधिश्रीन प्रभपावश्री हपोगपा, जजसक रे अन्तगरत 30 तदन क रे अन्दर स्थतगत धिनरपातश ककी जमपानत कर तनधिपाररणि अजधिकपारश्री क रे स0 दपाजखल कररेगरे अन्यथपा स्थगन आदरेश तनष्प्रभपावश्री हपो जपायरेगपा। आदरेश ककी प्रतत अपश्रीलपाथर्थी कर तनधिपाररणि अजधिकपारश्री कपो प्ररेतरत ककी जपायरे। तदनपानांक 25.04.2019 (उदय प्रतपाप जसह) एडश्रीशनल कतमश्नर गरेट-2 (अपश्रील) प्रथम वपातणिज्य कर गपाजजयपाबपाद।\" It is contended that no reasons are assigned by the first appellate authority while granting the stay of 50% of the disputed amount of tax. An appeal has been filed before the Commercial Tax Tribunal, Bench Ghaziabad under Section 57(4) of the Act. The Tribunal vide impugned order dated 14.05.2019 has allowed the appeal in part by directing the applicant to deposit 20% of the disputed amount within a period of 30 days. Having heard the learned counsel for the parties and after perusal of the orders passed by the assessing authority, first appellate authority and the impugned order of the Tribunal, I find substance in the submission of learned counsel for the applicant. Since pure legal issue is involved which is to be considered by the first appellate authority in the pending appeal and admittedly a prima facie case on merit is established by the applicant and further both the appellate authority have not applied their mind to consider the issue raised by the applicant, the orders dated 25.04.2014 and 14.05.2019 are liable to be set aside. Learned counsel for the applicant has placed reliance on the Division Bench Judgement of this Court in the case of ITC Ltd. vs. Commissioner (Appeals) passed in Writ Petition no. 1219 of 2003 decided on 23.10.2003. The relevant portion of the said judgment reads as follows: \"35. In view of above, the aforesaid authorities make it clear that the Court should not grant interim relief/stay of the recovery merely by asking of a party. It has to maintain a balance between the rights of an individual and the State so far as the recovery of sovereign dues is concerned. While considering the application for stay/waiver of a pre-deposit, as required under the law, the court must apply its mind as to whether the appellant has a strong prima facie case on merit. In case it is covered by the judgment of a Court/Tribunal binding upon the Appellate Authority, it should apply its mind as to whether in view of the said judgment, the appellant is likely to succeed on merit. If an appellant having strong prima facie case, is asked to deposit the amount of assessment so made or penalty so levied, it would cause undue hardship to him, though there may be no financial restrain on the appellant running in a good financial condition. the arguments that appellant is in a position to deposit or if he succeeds in appeal, he will be entitled to get the refund, are not the considerations for deciding the application. The order of the Appellate Authority itself must show that it had applied its mind to the issue raised by the appellant and it has been considered in accordance with law. The expression \"undue hardship\" has a wider connotation as it takes within its ambit the case where the assessee is asked to deposit the amount even if he is likely to exonerate from the total liability on disposal of his appeal. Dispensation of deposit should also be allowed where two views are possible. While considering the application for interim relief, the Court must examine all pros and cons involved in the case and further examine that in case recovery is not stayed, the right of appeal conferred by the legislature and refusal to exercise the discretionary power by the authority to stay/waive the pre- deposit condition, would be reduced to nugatory/illusory. Undoubtedly, the interest of the Revenue cannot be jeopardized but that does not mean that in order to protect the interest of the Revenue, the Court or authority should exercise its duty under the law to take into consideration the rights and interest of an individual. It is also clear that before any goods could be subjected to duty, it has to be established that it has been manufacture and it is marketable and to prove that it is marketable, the burden is on the Revenue and not on the manufacturer.\" Learned counsel for the applicant has also placed reliance of a recent decision of the Apex Court in the case of Principal Commissioner of Income Tax vs. Monat Ispat and Energy Ltd, SLP (C) No.6483 of 2018 dated 10th August, 2018 reported in 2018 SCC OnLine SC 984. The counsel for the applicant has relied on paragraph 3, 4 and 5 of the said judgment, which reads as follows; \"3. Given Section 238 of the Insolvency and Bankruptcy code, 2016, it is obvious that the Code will override anythin inconsistent contained in any other enactment, including the Income-Tax Act. 4. We may also refer in this Connection to Dena bank v. Bhikhaphai Prabhudas Parekh and Co. (2000) 5 SCC 694 and its progeny, making it clear that income-tax dues, being in the nature of Crown debts, do not take precedence even over secured creditors, who are private persons. 5. We are of the view that the High Court of Delhi, is, therefore, correct in law.\" In view of the aforesaid facts, in my opinion, the revision is liable to be allowed and first appellate authority is directed to decide the pending appeal expeditiously preferably within a period of three months from the date of production of certified copy of this order and the applicant will furnish the security to the extent of 20% of the disputed amount which will be other than cash or bank guarantee to the satisfaction of the assessing authority. As accepted by learned counsel for the applicant the security will be furnished before the assessing authority on or before 10.06.2019. The revision is, accordingly, disposed of. Order Date :- 30.5.2019 A.Kr.* "