Today, the Rajasthan High Court refused the demands made by the Department of Goods and Services Tax for Rajasthan opposite to the company of Ultratech Cement for unpaid dues of Binani Cement.
Binani Cement had faced huge losses in the preceding financial year, and so was not able to repay the loans taken from Bank of Baroda, its financial creditor. Then in 2018, the Aditya Birla Group of Industries acquired Binani Cement through Corporate Insolvency Resolution Process (CIRP) by paying a total of Rs. 7,900 crores and the company acquired was renamed by them as Ultratech Nathdwara Cement.
The Department of Goods and Services Tax for Rajasthan issued several notices to the company about different issues for the dues still unpaid by Binani Cement. The Department of Goods and Services Tax for Rajasthan said that the dues that were already unpaid by the company were not taken into consideration by the Aditya Birla Group of Industries at the time of acquisition. The department also said that these were not heard by the Committee of Creditors before finalizing the acquisition’s resolution plan so the department was not bound by it.
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Ultratech Nathdwara Cement argued that under the provisions of Insolvency and Bankruptcy Code (IBC) were made specially to ensure that no problems are faced by the company that brings the assets of the company to a state of liquidation.
The argument made by Ultratech Nathswara Cement caught the attention of the bench of two judges namely, Justice Vijay Bishnoi and Justice Sandeep Mehta and ruled that the acquirer company should be given some time and space to start everything on a clean slate, hence acknowledging the argument. “We are of the firm view that the authorities should have adopted a pragmatic approach and immediately withdrawn the demands rather than indulging in totally frivolous litigation, thereby unnecessarily adding to the overflowing dockets of cases in the courts,” said the division bench of the High Court of Rajasthan.
