# In the matter of ESL Steel Limited vs. Principal Commissioner & Ors.

> HC judgment dated 2023-07-11. Citation: TCN-2023-HC-00052. The case involves M/s ESL Steel Limited challenging an order confirming a demand of Rs.…

- **Court:** HC
- **Order date:** 11 Jul 2023
- **Citation:** TCN-2023-HC-00052
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/esl-steel-limited-vs-principal-commissioner-ors-9c8995f2

## Summary

### Background

The case involves M/s ESL Steel Limited challenging an order confirming a demand of Rs. 6,02,34,616/- under Section 74(9) of the Central Goods and Service Tax Act, 2017, due to alleged irregular availment of transitional credit during 2017-18. This includes credit claimed before 17.04.2018 and a balance claimed by filing a new TRAN-1, following a Supreme Court order. The petitioner argues that the demand was made without considering their reply and a Supreme Court judgment regarding recovery against the petitioner for dues prior to 17.04.2018, the date the National Company Law Tribunal approved their resolution plan. The State Bank of India had initiated Corporate Insolvency Resolution Process against the petitioner, and a resolution plan by M/s Vedanta Limited was

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## Facts

M/s ESL Steel Limited faced a demand of Rs. 6,02,34,616/- under Section 74(9) of the CGST Act, 2017, due to alleged irregular availment of transitional credit during 2017-18. This amount includes Rs. 5,10,21,204/- claimed before 17.04.2018 and Rs. 92,13,412/- claimed via a new TRAN-1 filing. The demand was confirmed by the Additional Commissioner, CGST & CEX, Ranchi. The petitioner's earlier management had filed the original TRAN-1 on 27.09.2017 but couldn't disclose CENVAT Credit on Capital Goods received in July and August 2017 (Rs. 92,13,412/-) due to GST Portal limitations. The petitioner requested to revise the TRAN-1. The State Bank of India initiated Corporate Insolvency Resolution Process (CIRP) against the petitioner, and the NCLT approved a resolution

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## Issues and analysis

### Issue 1: Whether the Respondent No. 2's order confirming the demand of Rs. 6,02,34,616/- under Section 74(9) …

**Ratio:** The adjudicating authority cannot arbitrarily confirm a demand without considering the

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**Reasoning:** The court found that the Respondent No. 2 confirmed the demand without considering the

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**Interpretation:** The principle is that quasi-judicial authorities must act fairly and

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**Application:** The court applied this principle to the facts, finding that the Respondent No.

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## Parties

- **Judges:** Rongon Mukhopadhya…; Deepak R…
- **Respondents:** M/s ESL Steel…; Principal…
- **Other parties:** Kohi…
- **Advocates:** Biren P…; Piyush P…; +1 more

## Timeline

- **2017-09-27 — Original TRAN…**: The earlier management of the Petitioner…
- **2017-07-01 — CENVAT Credi…**: The GST Portal did not allow the Petitioner to disclose and transition of CENVAT Credit…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 140(1) — Disqualification of bankrupt](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-140)

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