Clean slate principle does not extinguish GST liabilities when a corporate debtor is sold as a going concern.
Case-Laws
GST
Clean slate principle does not extinguish GST liabilities when a corporate debtor is sold as a going concern in liquidation. Such a sale transfers identified assets and liabilities as a single package, preserves the corporate identity, and requires the purchaser or new management to assume pre-existing, current and moratorium-period liabilities. The statutory priority for distribution of realised liquidation assets does not apply to a going-concern sale. GST demand proceedings require fresh adjudication where no effective reply was filed and transfer-of-business liability requires consideration, subject to a 25% deposit of disputed tax and a detailed reply.
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