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2023 (2) TMI 1320 - AT - Insolvency and BankruptcySeeking for stay of all the operations for attachment against the Applicant - Impugned Order fails to take into account that the Appellants have made the recovery of the outstanding demand for the Assessment Year 2013-14 and Assessment Year 2014-15 vide Form B on 14.11.2017 which is prior in time to the resolution plan being approved on 20.09.2018 - HELD THAT - On going through 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 and also 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. 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. Subsequently, the NCLT vide its order dated 22.10.2019 stated that since the Resolution Professional intimated the Appellants that the demand after finalization of appeal by CIT(A) would be payable by the new promoter, such written intimation of the Resolution Professional is to be read with the new resolution plan and the demand of the Appellants is duly considered and the Appellants have a right to lay its claim before the new promoter of the Respondent Company. It is observed that the Respondent were examined and rebuttal letter was sent to the Respondent stating that 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 - the dues of the Appellants are 'Government dues' and they are Secured Creditors - 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) and pass fresh orders as expeditiously as possible. Appeal disposed off.
Issues Involved:
1. Validity of the attachment orders issued by the Income Tax Department. 2. Implementation and compliance with the approved Resolution Plan. 3. Admissibility and treatment of the Income Tax Department's claims. 4. Impact of the Supreme Court's judgment in "State Tax Officer (1) Vs. Rainbow Papers Limited" on the case. 5. Jurisdiction and powers of the Resolution Professional and Adjudicating Authority. 6. Finality and modification of the Resolution Plan post-approval. Detailed Analysis: 1. Validity of the attachment orders issued by the Income Tax Department: The Income Tax Department issued attachment notices under Section 226(3) of the Income Tax Act, 1961, attaching sums for the assessment years 2014-15. The Adjudicating Authority set aside these attachment orders, allowing the company to operate its bank account without obstructions from the Income Tax Department. The Tribunal emphasized that the claim at this stage could not be entertained as it was filed 15 months after the approval of the Resolution Plan. 2. Implementation and compliance with the approved Resolution Plan: The Adjudicating Authority directed the Resolution Applicant to strictly implement the Resolution Plan as approved, without any violation. The Petitioner was also directed to file a compliance report within 15 days, ensuring that all current statutory dues, including EPF, Income Tax, and GST, were paid up-to-date. 3. Admissibility and treatment of the Income Tax Department's claims: The Income Tax Department's claims for the assessment years 2013-14 and 2014-15 were filed before the date of admitting the insolvency application. The Resolution Professional initially considered these claims as contingent liabilities due to pending appeals with the Commissioner of Income Tax (Appeals). The Tribunal noted that the Resolution Professional had acknowledged these dues and had communicated that they would be payable by the new promoter after the final order by the CIT(A). The Tribunal held that the claims could not be entertained after 15 months of the approval of the Resolution Plan, as they were not fresh claims but rights laid to claims made before the NCLT. 4. Impact of the Supreme Court's judgment in "State Tax Officer (1) Vs. Rainbow Papers Limited" on the case: The Tribunal relied on the Supreme Court's judgment in "State Tax Officer (1) Vs. Rainbow Papers Limited," which emphasized that statutory dues are secured creditors and must be considered in the Resolution Plan. The Tribunal observed that the facts of the instant appeal were covered by the ratio of the aforesaid judgment, which had not been considered by the Adjudicating Authority. 5. Jurisdiction and powers of the Resolution Professional and Adjudicating Authority: The Tribunal noted that the Resolution Professional's role is to collect claims and prepare the information memorandum, not to adjudicate claims. The communication made by the Resolution Professional regarding the contingent liabilities was not binding on the successful resolution applicant. The Tribunal emphasized that the Adjudicating Authority must ensure that the Resolution Plan meets the requirements of Section 30(2) of the IBC. 6. Finality and modification of the Resolution Plan post-approval: The Tribunal highlighted that once the Resolution Plan is approved by the Committee of Creditors and the Adjudicating Authority, it becomes binding on all stakeholders and cannot be altered or modified. The Tribunal noted that the claim of the Income Tax Department was accepted to the extent of Rs. 1,97,92,084/-, and an amount of Rs. 1,20,23,691.03 was paid towards full and final settlement. The Tribunal held that any further claims beyond what was admitted by the Resolution Professional would lead to a modification of the Resolution Plan, which is not allowed under the IBC. Conclusion: The Tribunal set aside the impugned order dated 20.01.2021 passed by the Adjudicating Authority (NCLT, Guwahati Bench) and remitted the matter back to the Adjudicating Authority to hear the parties afresh, considering the facts and the Supreme Court's judgment in the "Rainbow Papers Limited" case. The Tribunal directed the Adjudicating Authority to pass fresh orders expeditiously.
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