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2020 (2) TMI 1185 - HC - GSTEffect of order of Moratorium declared under IBC - proceeding pending before the GST authorities under the GST Act 2017 - HELD THAT - The Commissioner takes a view that by the order dated 26.08.2019, the National Company Law Tribunal has declared a moratorium under Section 14 (Section 13) of The Insolvency and Bankruptcy Code, 2016 against the corporate debtor in respect of execution of any judgment and decree or order of any court of law, tribunal, arbitration panel or other authority. Accordingly, in the order of the Commissioner a question was raised whether issuance of show cause notice by the GST authorities would mean to be an execution of an order or it be treated as decree against the petitioner. By raising such question, the objection that the further proceeding is not maintainable because of the order of moratorium of the National Company Law Tribunal was overruled. From the order dated 15.1.2019, it is discernible that the aspect as to whether a pending proceeding before GST authority is also a proceeding as provided in Section 14- (1) (a) has not been examined by the Commissioner of GST and consequently the implication thereof i.e. if it is a proceeding whether the order of moratorium would also cover the said proceeding, has also not been looked into. The matter is remanded back for a fresh consideration by examining the aspect as to whether the order of moratorium of the National Company Law Tribunal also covers the proceeding pending before the GST authorities under the GST Act 2017 - Petition allowed by way of remand.
Issues:
Challenge to order of Commissioner, GST imposing payment and penalty on a corporate debtor during moratorium under Insolvency and Bankruptcy Code, 2016. Analysis: The judgment concerns a writ petition challenging an order dated 15.11.2019 of the Commissioner, GST, Dibrugarh, which confirmed a payment requirement and imposed a penalty on a corporate debtor during a moratorium period under the Insolvency and Bankruptcy Code, 2016. The petitioner argued that they were declared a corporate debtor by the National Company Law Tribunal, Guwahati, on 26.08.2019, leading to a moratorium under Section 13 of the Code. The Commissioner's order was contested on the grounds that the moratorium should have prevented further proceedings against the corporate debtor. The Commissioner's order, specifically paragraph 3.2, acknowledged the moratorium declared by the National Company Law Tribunal and raised the question of whether the issuance of a show cause notice by GST authorities would constitute an execution order or a decree against the petitioner. The Commissioner's view was that the moratorium did not bar the tax authority from carrying out the adjudication process to determine the liability of the assessee towards the department. The judgment analyzed Section 14(1) of the Insolvency and Bankruptcy Code, 2016, which mandates a moratorium on the insolvency commencement date prohibiting the institution of suits, continuation of pending suits or proceedings, and execution of any judgment, decree, or order against the corporate debtor. It was emphasized that the moratorium covers not only the execution of orders but also the institution or continuation of suits or proceedings against the corporate debtor. However, the Court found that the Commissioner did not examine whether the pending proceeding before the GST authority fell within the ambit of Section 14(1)(a) of the Code and whether the moratorium extended to cover such proceedings. Consequently, the order dated 15.11.2019 was set aside, and the matter was remanded for fresh consideration to determine if the National Company Law Tribunal's moratorium also applied to the pending proceeding before the GST authorities under the GST Act 2017. The Court directed the reevaluation to be completed within one month from the receipt of the order. In conclusion, the writ petition was disposed of, emphasizing the need for a comprehensive assessment of the applicability of the moratorium to ongoing proceedings involving the corporate debtor under the GST Act 2017.
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