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2023 (2) TMI 1319 - AT - Insolvency and BankruptcyExtinguishment of demand - Impugned Order fails to take into account that the Resolution Professional had intimated that the dues of the Income Tax department as and when they became payable after the appeal process would be payable by the successful resolution applicant - modification of Resolution Plan duly approved and implemented - HELD THAT - Taking consideration the fact that the Appellants placed demand of Income Tax for the Assessment Year 2013-14 for Rs. 6,69,84,657 Assessment Year 2014-15 for Rs. 9,50,41,296 totaling to Rs. 16,20,25,953/- before the Resolution Professional which were outstanding before the date of admitting the application and the claim was filed in the form of Form - B dated 14.11.2017 by Income Tax Department. It is also observed that on 25.10.2018, the Appellants received a draft of Rs. 41,22,407 from the Resolution Professional as a tranche payment. Further, the Appellants received another draft of Rs. 78,90,284 vide letter dated 07.01.2019 as a full and final payment totalling to Rs. 1,20,23,691 which is not even 15% of the outstanding demand. The Respondent was asked to pay the outstanding demand vide letter no. 674 dated 12.03.2019. However, the Respondent wrote to the Appellants for extinguishing all claims against them relating to the period prior to the date of order of the NCLT since as per the approved resolution plan at clause 12.1 no other amount was to be paid to the Operational Creditors. The Appellants filed an application for review of the order passed by the NCLT dated 20.09.2018 with necessary directions to the Resolution Professional for submission of the revised resolution plan incorporating the entire amount alleged to be due to the Appellants. The stay granted by the Appellate Authority had since expired on 13.12.2019 and therefore, the Respondent was requested to pay the outstanding demand for the Assessment Year 2014-15 immediately and intimated within 7 days. Since, there was no compliance of the notice sent by the Appellants a bank attachment in the following banks were carried out; (i) Allahabad Bank, Dibrugarh Branch and (ii) Allahabad Bank, Industrial Finance Bank, Kolkata and further an email dated 28.01.2020 was received from the Allahabad Bank Industrial Finance Bank, Kolkata that accounts have been marked debit freeze. These facts have not been considered by the Adjudicating Authority while passing the impugned order. Admittedly, the judgment passed by the Hon ble Supreme Court in the case of STATE TAX OFFICER (1) VERSUS RAINBOW PAPERS LIMITED 2022 (9) TMI 317 - SUPREME COURT , the dues of the Appellants are Government dues and they are Secured Creditors. Thus, the impugned order passed by the Adjudicating Authority (National Company Law Tribunal, Guwahati Bench, Guwahati) is hereby set aside and the matter is remitted back to the Adjudicating Authority (National Company Law Tribunal, Guwahati Bench, Guwahati) with a request to hear the parties (Appellants and Respondent herein). Appeal disposed off.
Issues Involved:
1. Extinguishment of tax demands for various assessment years. 2. Admissibility of tax claims by the Resolution Professional. 3. Compliance with the approved Resolution Plan. 4. Legal standing of the tax department's claims post-CIRP approval. 5. Interpretation of relevant Supreme Court judgments. Issue-wise Detailed Analysis: 1. Extinguishment of Tax Demands: The Respondent, Assam Company India Ltd., sought the extinguishment of tax demands for multiple assessment years (1986-1987, 2006-2007, 2010-2011, 2011-2012, 2012-2013, 2013-2014, and 2014-2015) and any other demands prior to September 20, 2018. The Adjudicating Authority ruled that since the Respondents did not file claims for the periods except for 2013-14 and 2014-15 before the Resolution Professional, these claims would not be entertained if filed later. 2. Admissibility of Tax Claims: The Appellants (Income Tax Department) argued that their claims for the assessment years 2013-14 and 2014-15 were submitted before the approval of the Resolution Plan and should be considered. The Resolution Professional had earlier communicated that the claims were contingent liabilities and would be payable by the new promoter after the final order from the CIT(A). The NCLT, Guwahati, had initially accepted this position, allowing the Appellants to claim these dues from the new promoter. 3. Compliance with the Approved Resolution Plan: The Respondent contended that the approved Resolution Plan, which extinguished all claims prior to the effective date (September 20, 2018), should be binding. The Appellants argued that the Resolution Professional's communication regarding the contingent nature of the tax claims should be considered part of the Resolution Plan, thus making the new promoter liable for these dues. 4. Legal Standing of the Tax Department's Claims Post-CIRP Approval: The Appellants argued that the tax dues were government dues and thus should be treated as secured claims. They relied on the Supreme Court judgment in "State Tax Officer (1) Vs. Rainbow Papers Limited," which held that statutory dues are secured claims and should be considered in the Resolution Plan. The Respondent, however, cited other judgments to argue that once a Resolution Plan is approved, it becomes binding on all stakeholders, including the government, and cannot be modified to include additional liabilities. 5. Interpretation of Relevant Supreme Court Judgments: The Appellants cited the "Rainbow Papers Limited" judgment to support their claim that statutory dues should be treated as secured claims. The Respondent countered with judgments from "Essar Steel," "Ghanashyam Mishra," and others to argue that the Resolution Plan, once approved, cannot be altered to include additional liabilities. The Tribunal noted the importance of the "Rainbow Papers Limited" judgment, which emphasized that statutory dues are secured and must be considered in the Resolution Plan. Conclusion: The Tribunal set aside the NCLT's order dated February 10, 2021, and remitted the matter back to the NCLT, Guwahati Bench, for reconsideration. The NCLT was directed to hear the parties again, considering the facts and the Supreme Court judgment in "Rainbow Papers Limited," and to pass fresh orders expeditiously. The Tribunal emphasized that the tax department's claims, being government dues, should be treated as secured creditors.
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