M/S. Tata Steel Limited (Formerly Tata Steel Bsl Limited) vs. Union Of INDIA And Ors.

Held

The Court held that the CESTAT/Tribunal did not act irregularly or fail to exercise its jurisdiction in not adjudicating whether the payments made in relation to the adjudication orders, which formed the subject matter of the appeals, could constitute a claim by respondent no. 2. The Court reasoned that the appeals were heard on the basis of orders that waived pre-deposits, and the scope of inquiry before the High Court was limited to whether the tribunal acted within its authority, not to question the correctness of the decision on facts. The CESTAT, as a creature of statute, could not have adjudicated on the voluntary deposit made by the petitioner prior to the appeals as a security deposit once the appeals had abated. The Court found no irregularity or jurisdictional error in the CESTAT's common order, noting that the petitioner failed to identify any illegality or violation of principles of natural justice. The Supreme Court's judgment in Ghanashyam Mishra and Sons Pvt. Ltd. (supra) was cited, emphasizing that in taxation matters, equitable considerations are of no significance and courts must adhere strictly to the words of the statute. The Court concluded that the abatement of appeals by operation of law was correctly applied, and no interference was called for.

Facts

The petitioner, M/s. Tata Steel Limited (formerly M/s. Bhusan Steel Ltd. or BSL), filed writ petitions challenging a common final order dated April 16, 2024, by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The CESTAT had declared the appeals filed by BSL as abated due to its corporate insolvency. BSL had procured steel structures, parts, accessories, and cement, treating them as 'capital goods' and taking CENVAT credit. Show-cause notices were issued for periods between August 2005 and July 2009, demanding disallowance of CENVAT credit amounting to Rs. 151,98,18,355/-, Rs. 5,01,82,810/-, Rs. 4,78,91,060/-, and Rs. 3,04,17,110/-. Orders in original disallowed credit totaling Rs. 140,46,88,065/-, Rs. 2,74,86,476/-, Rs. 2,09,40,479/-, and Rs. 15,46,214/-, deeming these items as 'supporting structures' not covered under 'capital goods'. BSL reversed the credit under protest and appealed to CESTAT. During the pendency of these appeals, insolvency proceedings were initiated against BSL under the IBC, and a resolution plan was approved by the NCLT and affirmed by the appellate tribunal. The petitioner contends that the resolution plan extinguished all claims, including tax dues, whether claimed or not.

Key Issues

1. Whether the CESTAT acted irregularly or failed to exercise its jurisdiction by not adjudicating whether payments made in relation to adjudication orders, which were subject to appeals, could constitute a claim by respondent no. 2, especially when the appeals were heard on the basis of orders waiving pre-deposits, in light of the provisions of Rule 22 of the Rules and the Supreme Court's judgment in Ghanashyam Mishra and Sons Pvt. Ltd. (supra)? Petitioner's arguments: The petitioner argued that the resolution plan, approved under the IBC, extinguished all claims, including tax dues, whether claimed or not. They contended that the CESTAT erred in abating the appeals without considering the impact of the resolution plan and the subsequent renaming of BSL to Tata Steel BSL Limited. They relied on the principle that what is good for the goose is good for the gander, implying that the new entity should not be burdened by the abated appeals. Revenue/State's arguments: The revenue/state did not explicitly record arguments in the judgment regarding the abatement of appeals. However, the judgment implies that the CESTAT correctly applied Rule 22 of the Rules and Supreme Court pronouncements, which do not permit implying provisions not expressly stated in a statute, particularly in taxing matters. The judgment notes that the respondent no. 2, as an operational creditor, did not include claims related to the assessment orders in its filing, and the appeals stood abated by operation of law.