2020 (12) TMI 1215 - Tri - Insolvency and Bankruptcy

Seeking directions to defreeze accounts of petitioner - Section 33(5) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - The applicant has annexed copy of notice, issued by the office of the Assistant Commissioner of State Tax, under Section 44 of the Gujarat Value Added Tax Act, 2003 (GVAT Act) dated 01.09.2020. However, on receipt of the said notice, the applicant has not responded, i.e. within seven days from the date of receipt of the notice, as stipulated in the notice itself. It is the prime duty of the liquidator to apprise the competent authority of the State Tax office, Vadodara, about the present status and give appropriate reply to the said notice. Instead of doing that, approached this Adjudicating Authority - Under such circumstance, the liquidator may approach before the competent authority, i.e. office of the State Tax, and get redress and / or apprise the present status of the corporate debtor company with the relevant provisions as provided in the I B Code. It is needless to mention herein that the Assistant Commissioner of State Tax have their own Adjudicating Authority as well as Appellate Authority to adjudicate upon any matter as per law so provided by the parliament. The instant application is dismissed, as not maintainable.

Summary

Issues:
- Application under Section 33(5) of the Insolvency and Bankruptcy Code, 2016 regarding defreezing of a bank account held by the Corporate Debtor.
- Attachment of the bank account by the Assistant Commissioner of State Tax affecting the ability to meet liquidation expenses.
- Failure to respond to the notice issued by the State Tax office.
- Jurisdictional concerns regarding approaching the Adjudicating Authority instead of the competent State Tax office.
- Dismissal of the application as not maintainable.

Analysis:
The judgment pertains to an application filed under Section 33(5) of the Insolvency and Bankruptcy Code, 2016, seeking directions to defreeze a specific bank account held by the Corporate Debtor at Kotak Mahindra Bank Ltd. The Corporate Debtor is in liquidation with a sole current account at the bank, containing a certain amount. However, the account has been frozen due to attachment by the Assistant Commissioner of State Tax, Vadodara, hindering the applicant's ability to manage liquidation expenses. The applicant approached the Tribunal for relief.

Upon review of the record, it was noted that the applicant had received a notice from the State Tax office but failed to respond within the stipulated seven days. The Tribunal emphasized the importance of the liquidator engaging with the competent State Tax authority to address such matters instead of bypassing them and directly approaching the Adjudicating Authority. The State Tax Authority possesses the necessary powers to handle issues related to taxation and has its own Adjudicating and Appellate Authorities for resolution.

The Tribunal concluded that the application was not maintainable in this instance and advised the liquidator to seek redressal from the competent State Tax office to address the grievances effectively. The judgment underscores the significance of respecting the jurisdictional boundaries of relevant authorities and utilizing the appropriate channels for dispute resolution. Consequently, the application was dismissed on grounds of non-maintainability, allowing the liquidator the freedom to pursue resolution through the appropriate channels.