2018 (8) TMI 1775 - SCH - Income Tax

Income tax dues - priority to debts to be discharged - section 238 of the Insolvency and Bankruptcy Code, 2016 - Held that - Section 238 of the Insolvency and Bankruptcy Code, 2016, it is obvious that the Code will override anything inconsistent contained in any other enactment, including the Income-Tax Act - it is held in the case of Dena Bank vs. Bhikhabhai Prabhudas Parekh and Co. Ors. 2000 (4) TMI 36 - SUPREME COURT and its progeny, making it clear that income-tax dues, being in the nature of Crown debts, do not take precedence even over secured creditors, who are private persons. SLP dismissed.

Summary

The Supreme Court of India ruled that the Insolvency and Bankruptcy Code, 2016 will override any inconsistency with the Income-Tax Act. Income-tax dues do not take precedence over secured creditors. The High Court of Delhi was correct in law. Special Leave Petitions were dismissed.