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2020 (3) TMI 663 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT - This application filed by the Petitioner under section 9 of the Insolvency Bankruptcy Code, 2016 is Rejected on the ground that - (i) the Petitioner(Buyer) has failed to submit C-Form to the Respondent(Seller) in time as per the terms of the Letter of Award, dated. 29.05.2015. (ii) the amount claimed in the Petition is the VAT amount, which has already been collected from the Petitioner and deposited with the Government by the Respondent for want of C-Form within the time period stipulated in the Letter of Award. The Respondent is hereby directed to co-operate with the Applicant and both the Applicant and Respondent may take-up the matter with the respective Department of the Government for refund, if otherwise amount is refundable and as per Law. Petition disposed off.
Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016. 2. Non-refund of VAT amount due to non-submission of C-Form within stipulated time. 3. Compliance with procedural requirements under the Insolvency and Bankruptcy Code and Rules. 4. Pre-existing dispute and maintainability of the petition. Issue-wise Detailed Analysis: 1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016: The petition was filed by the Operational Creditor seeking initiation of CIRP against the Corporate Debtor for recovery of unpaid operational debt amounting to ?14,43,691.00. The Operational Creditor claimed that the Corporate Debtor failed to refund the VAT amount within 10 days from the receipt of the C-Form, as stipulated in the Letter of Award dated 29.05.2015. 2. Non-refund of VAT amount due to non-submission of C-Form within stipulated time: The Corporate Debtor argued that the Operational Creditor failed to submit the C-Form before the removal of goods, as required by the Letter of Award. The goods were removed between 30.06.2015 and 24.07.2015, but the C-Forms were submitted only on 26.11.2015 and 08.05.2016, after the VAT amount had already been deposited with the Government. The Corporate Debtor contended that the amount claimed by the Operational Creditor had been paid to the Government Exchequer and was not lying with the Corporate Debtor. 3. Compliance with procedural requirements under the Insolvency and Bankruptcy Code and Rules: The Corporate Debtor raised procedural objections, stating that the documents submitted by the Operational Creditor were electronic and lacked certification under Section 65B of the Evidence Act, 1872. Additionally, the Operational Creditor failed to provide a statement of the bank account where deposits were made or credits were received in respect of the debt, as required under Form 5 of Rule 6 of the Insolvency and Bankruptcy Rules, 2016. The Corporate Debtor also argued that no proper demand notice under the Insolvency and Bankruptcy Code had been served. 4. Pre-existing dispute and maintainability of the petition: The Corporate Debtor contended that there was no operational debt as the amount claimed was a tax amount already deposited with the Government. They argued that the petition was not maintainable under Sections 8 and 9 of the Code, as there was no default in payment of debt. The Operational Creditor, however, argued that the debt was towards VAT, which incurs during the operation of the company, and that the Corporate Debtor had not raised any pre-existing dispute before the issuance of the demand notice. They relied on judgments from the Hon'ble NCLAT and the Supreme Court to support their claims. Order: The Tribunal, after considering the arguments and documents from both sides, rejected the petition on the grounds that the Operational Creditor failed to submit the C-Form in time as per the terms of the Letter of Award. The VAT amount claimed had already been collected and deposited with the Government by the Corporate Debtor due to the late submission of the C-Form. The Tribunal directed both parties to cooperate and take up the matter with the Government for a refund if applicable. The petition was disposed of with no order as to costs.
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