ULTRATECH CEMENT LIMITED AND ANR vs UNION OF INDIA AND ORS.

18.09.2026
ct no. 10
Sl.06
AGM


WPA 2036 of 2020
with
IA No : CAN 3 of 2025

Ultra Tech Cement Limited & Anr.
-Versus-
Union of India & Ors.

Mr. D. N. Sharma. Sr. Adv.
Mr. Ajay Bhargava.
Mr. Anunoy Basu.
…for the petitioners.

Mr. Prithu Dudhoria.
… for the Union of India.

1. The petitioner No. 1 is a wholly owned
subsidiary of Ultratech Cement Limited and is
engaged in manufacture of cement. The petitioner
was the successful resolution applicant in respect
of Binani Cement Ltd. under the Insolvency and
Bankruptcy Code 2016 (IBC).
2. The Corporate Insolvency Resolution Process
(CIRP) in respect of Binani Cement Limited
commenced on 25.7.2017 pursuant to admission of
an application under Section 7 of the IBC filed by
Bank of Baroda. A public announcement inviting
claims was issued by the Resolution Professional
on 29.7.2017 under Section 13 and 15 of the IBC.
3. The Resolution plan submitted by Ultratech
Cement Ltd. was unanimously approved by the
committee of creditors and came to be approved by
the National Company Law Appellate Tribunal
(NCLAT), on 14.11.2018 in Company Appeal (AT)

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No.188 of 2018, which has been affirmed by the
Hon‟ble Supreme Court vide order dated 26.7.2019.
The effective date of takeover of management is
20.11.2018 (hereinafter referred to as Transfer
date).
4. The present writ petition has been filed
challenging inter alia, the legality of orders dated
24.12.2019 and 31.12.2019 and notices dated
3.1.2020, 20.1.2020 and 23.1.2020 issued by the
Income Tax Department and for a direction upon
the respondents to refund the amounts already
adjusted. Specifically the petitioner challenges the
adjustment of:
i. Rs. 1,43,46,686/-
ii. Rs. 67,69,380/- and

iii. Rs. 1,12,73,866/- being refund for A.Y. 2019-
2020 adjusted against outstanding demand for A.Y
2011-2012 all relating to the period from A.Y.
2007-2008 to 2015-16 i.e. period prior to the
Transfer Date.
5. The core issue involved in the present case are
as follows :-
i. Whether Income Tax Authorities are justified in
raising demands for pre-CIRP period after approval
of the Resolution Plan?
ii. Whether re-assessment / adjustment after
20.11.2018 is justified in law?
iii. Whether such action of the Income Tax
Authorities is in violation of the approved

3
Resolution Plan and Section 31 and Section 238 of
the IBC?
6. Learned senior counsel appearing for the
petitioner submits as follows;

i. By an interim order dated 08.07.2021 passed
by His Lordship the Hon‟ble Justice Md.
Nizamuddin (as His Lordship then was) the
respondents were restrained from giving further
effect to the impugned orders / notices till
30.09.2021. Despite such interim protection, the
Centralized Processing Centre (CPC) has adjusted
the refunds against demands for the pre-transfer
period.
ii. Such action is de hors the mandate of the
approved Resolution Plan dated 14.11.2018. The
plan specifically provides that all assets of the
Corporate Debtor shall be free from all
encumbrances, claims, whether known or
unknown, and all litigations initiated, arisen or
pending before the transfer dated shall stand
withdrawn and extinguished.
iii. The petitioner places reliance upon a judgment
of the Hon‟ble Supreme Court in paragraph Nos.
102 to 102.3 in the case of Ghanashyam Mishra
and Sons (P) Ltd. Vs. Edelweiss Asset
Reconstruction Company Ltd. reported in
(2021) 9 SCC 657. Wherein it has been observed
that once a Resolution Plan is approved under

4
Section 31 (1) of the IBC, all claims stand frozen
and are binding on all stakeholders including the
Central government, State Government and Local
authorities all claims which are not part of the
Resolution Plan shall stand extinguished and no
person is entitled to initiate or continue any
proceeding in respect of such claims.
The relevant portions of the paragraphs are
reproduced hereinbelow:
“102. In the result, we answer the questions framed
by us as under:
102.1. That once a resolution plan is duly approved
by the adjudicating authority under sub-section (1) of
Section 31, the claims as provided in the resolution
plan shall stand frozen and will be binding on the
corporate debtor and its employees, members,
creditors, including the Central Government, any
State Government or any local authority, guarantors
and others stakeholders. On the date of approval of
resolution plan by the adjudicating authority, all
such claims, which are not a part of resolution plan,
shall stand extinguished and no person will be
entitled to initiate or continue any proceedings in
respect to a claim, which is not part of the resolution
plan.
102.2. The 2019 Amendment to Section 31 of the
I&B Code is clarificatory and declaratory in nature
and therefore will be effective from the date on which
the I&B Code has come into effect.
102.3. Consequently 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.”

iv. Further reliance has been placed by the
petitioner upon the paragraph Nos. 35 to 37 in the
case of JSW Steel Ltd. Vs Pratistha Thakur
Haritwal reported in 2025 SCC Online Supreme
Court 672 . Wherein it has been held that
continuation of proceedings after the judgment in

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Ghanashyam Mishra and Sons (P) Ltd. (Supra) is
contemptuous in nature. The demand notices were
held to be illegal and quashed. The relevant
paragrapsh No. 35 to 37 are reproduced herein
below;
“35. We have, therefore, no hesitation in holding that
the continuation of the proceedings by the
respondents/authorities even after the judgment of
this Court in Ghanshyam Mishra (Supra) was
specifically brought to their notice is contemptuous in
nature. However, we do not propose to proceed
against the respondents/contemnors inasmuch as
they are entitled to benefit of doubt.
36. It is the contention of the alleged contemnors that
the State of Chhattisgarh was not a party to the Writ
Petition or to the proceedings before the learned
NCLT. No doubt that even if any stakeholder is not a
party to the proceedings before the NCLT and if such
stakeholder does not raise his claim before the
Interim Resolution Professional/Resolution
Professional, the Resolution Plan as approved by the
NCLT would still be binding on him. However, this
being one of the first cases arising out of the
judgment of this Court in the case of Ghanshyam
Mishra (Supra), we do not propose to take any stern
action against the respondents/contemnors. In any
case, the respondents/contemnors have tendered
their unconditional apology.
37. In this view of the matter, though we hold that
the act of the alleged contemnors is contemptuous in
nature, we do not propose to take any action against
them. The demand notices issued by the contemnors
on the Petitioner Company and all proceedings
pursuant thereto are held to be illegal and the same
are quashed and set aside. We dispose of the
contempt petition accepting unconditional apology of
the contemnors.”

v. The petitioner also places reliance upon a
judgment of the Division Bench of this Hon‟ble
Court presided over by the Chief Justice, T. S.
Sivagnanam (as His Lordship then was) in the case
of PCIT-3 Kolkata Vs. M/s. Srishtri Hotel Private
Ltd. being I.A. No. G.A/3/2024 in ITA/36/2020
has observed in paragraphs Nos. 11 and 12, the
relevant portions of the above paragraphs is
reproduced herein below:

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“11. Admittedly, the claim in respect of the demand
which is the subject matter of the present
proceedings was not lodged by Respondent 2 after
public announcements were issued under Sections
13 and 15 IBC. AS such, on the date on which the
resolution plan was approved by the learned NCLT,
all claims stood frozen, and no claim, which is not a
part of the resolution plan, would survive.
12. In that view of the matter, the appeals deserve to
be allowed only on this ground. It is held that the
claim of the respondent, which is not part of the
resolution plan, does not survive. The amount
deposited by the appellant at the time of admission
of the appeals along with interest accrued thereon is
directed to be refunded to the appellant.”

vi. A reliance has also been placed upon Vaibhab
Goyal and Anr Vs. DCIT reported in 2025 SCC
Online Supreme Court 592 read with Committee
of Creditors of ESSAR Steel Ltd. Vs. Satish
Kumar Gupta reported in (2019) 16 SCC 1478
wherein it has been categorically observed that
once Resolution Plan is approved, no belated claim
can be included. A successful resolution applicant
cannot be faced with undecided claims like Hydra
Heads Popping up. The business must re-
commence on a clean slate, and on a paid off order
basis. All claims must be submitted to the
Resolution Profession.
vii. The Income Tax Department being an
operational creditor had submitted the proof of
debt in Form „B‟ before the Resolution Professional
claiming a total amount of Rs. 24,06,35,175/-,
which after collation was rejected by the Resolution
Professional
viii. Attention is drawn to Section 38 of the
IBC 2016 which provides that provisions of the

7
Court shall have effect notwithstanding anything in
consistent therewith contained in any other law.
ix. The Learned Counsel appearing for the Income
Tax Authorities files a report in the form of an
affidavit which is taken on record.
7. It is strenuously argued that adjustment of
refund has been carried out strictly in accordance
with law under Section 245 of the Income Tax Act,
1961 since the Income Tax Authorities are
empowered under the Act to set off any refund due
to an assessee against any sum remaining payable
under the Act after giving intimation in writing to
the assessee of the proposed action.
8. It is further submitted that the CPC has duly
issued intimation under Section 245(1) of the said
Act, to the petitioner and thereafter adjusted
refund for Assessment Year 2019-20 against
outstanding demand for Assessment Year 2011-12.
The refund amounting to Rs. 1,12,73,866/- for
Assessment Year 2019-20 was determined vide
intimation issued under Section 143(1) of the
Income Tax Act (hereinafter referred to as the “said
Act”) dated 24.08.2020.
9. Having heard the parties and upon perusing
records made available, this Court finds that the
petitioner has been able to make out a prima facie
case for interference.

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10. This Court has taken judicial notice of all
documents including the intimation issued under
Section 245 and the judgments cited at the bar.

11. In light of the ratio laid down in Ghanashyam
Misra (supra), Essar Steel (supra) and Vaibhav
Goes (supra), this Court is of the considered view
that the Income Tax Authorities have no right to
adjust refund for period which stood frozen. As
such, on date on which Resolution Plan was
approved by NCLAT dated 14.11.2018, all claims
stood frozen and no claims, which does not form
part of the Resolution Plan can survive.
12. The Income Tax Authorities can also not initiate
any fresh proceedings in respect of demands raised
prior to the Transfer Date i.e. upto A.Y. 2019-20.

13. Section 238 of the IBC, 2016 contemplates that
the provision of of the Code shall have effect
notwithstanding anything inconsistent therewith
contained in any other law for the time being in
force or any instrument having effect by virtue of
any such law.
14. It is a well settled proposition of law that
income tax dues being “crown debts”, have no
priority over secured creditors and are extinguished
upon approval of the Resolution Plan if not
included therein.
15.
In view of the above discussion, the Writ
Petition is disposed of with the following directions:

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a. The issuance of impugned notices proposing to
initiate fresh proceedings along with consequential
orders and proceedings pertaining to period prior to
transferred date i.e. upto Assessment Year 2019-20
are held to be arbitrary, illegal, not sustainable in
the eye of law and are hereby quashed and set
aside.
b. The respondent authority shall entitle the
petitioner to carry forward the unabsorbed
depreciation and accumulated losses as per the
returns of income filed prior to transferred date i.e.
upto Assessment Year 2019-20 and to utilise such
amounts to set off future tax obligations in
accordance with law.

c. The Income Tax Authorities shall without
making any adjustment, refund the amount which
the petitioner is entitled to along with prevailing
banking interest as per law which has not been
granted till date or has been recovered wrongfully
by way of adjustment for period prior to the
Transfer Date.
d. The Income Tax Department shall accept the
returns of income filed for the period prior to the
Transfer Date. No reassessment or any other
proceedings under the said Act shall be initiated
against the petitioner for the period prior to the
Transfer Date. The respondent authorities are
directed to refund the same in accordance with law

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forthwith, preferably within a period of four weeks
from date.
e. The respondent Income Tax Authorities are
directed to refund an amount which have already
been adjusted from the demands for the period
prior to the Transfer Date i.e. upto Assessment
Year 2019-20 to the petitioner forthwith within a
period of six weeks from date along with interest in
accordance with law.
f. This Court however, deems it appropriate to
observe that the Income Tax Authorities ought to
be more circumspect, prudent and vigilant
henceforth. Upon approval of a Resolution Plan
under the IBC Code, they are expected to forthwith
withdraw all demands pertaining to the pre-
transferred period instead of persisting with
frivolous and untenable proceedings, thereby
unnecessarily burdening the already overcrowded
dockets of this Court.
16. With the above observations and directions
WPA No. 2036 of 2020 along with all connected
applications are hereby disposed of.
17. Urgent photostat certified copy of this order, if
applied for, be supplied to the parties subject to
compliance with all requisite formalities.


(Smita Das De, J.)