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TMI Blog2020 (3) TMI 665X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the properties attached by them, being in the form of "Finished Goods", raw materials and the machineries belonging to the Corporate Debtor and to hand over to IRP of the Corporate Debtor and lodge the claim with the IRP. The IRP has further prayed to issue directions to the GST Department to activate the GST No.-24AACCE3088M1ZF, deactivated by the GST Department. 2. For the sake of brevity, it is stated that on a petition filed by one M/s. Balaji Metal & Alloys, the Operational Creditor under section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as IB Code), vide order dated 16th September, 2019 in CP(IB) No. 188 of 2019 was declared and the Applicant was appointed as IRP. 3. It is stated that the Corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that it is the duty of the IRP under section 25 of the IB Code to take control and custody of the assets over which the Corporate Debtor has ownership rights as recorded in the Balance Sheet of the Corporate Debtor including the assets that may or not be in the possession of the Corporate Debtor. 6. Opportunity was given to the Department of GST to place their concerns before this Adjudicating Authority. The Respondent Deputy Commissioner of State Tax, (Enforcement) Division-8, Surat filed their written submissions by way of an affidavit dated 30th December, 2019. 6.1 It is stated by the Respondent that Corporate Debtor is a defaulter to the statutory dues of the Gujarat State GST Department of the amount of Rs. 2,05,41,236/-. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her laws which are in contravention to the provisions of IBC. 7.3 Now, let us have a look at the Overriding Provision of IBC - Section 238 Section 238: Provisions of this Code to override other laws: The provisions of this Code shall have an effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any an instrument having an effect by virtue of any such law. Section 238 stands as a non-obstante clause. It means clause or provision in the act empowers to override any other provision or clause contrary under this law or different law. To clarify the issue further, it is expedient to discuss the case(s) herein below: Innoventive Industries Limited Innoventive industries which is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he way of the IBC. Sterling SEZ Infrastructure Ltd, In this case, SREI Infrastructure Financial Ltd initiated the Corporate Insolvency Resolution Process (CIRP) against Sterling SEZ and its holding co Sterling Biotech Limited (SBL). The credit facilities availed by the SBL group from the various bank and financial institution to the extent of Rs. 8100 Crores were further declared as fraud account by the concerned Banks. In the fear of arrest, promoters of the SBL Group left the country under suspicious circumstances. In result, proceedings were initiated against the Corporate Debtor by the office of the Enforcement Directorate and attachment of the assets belonging to the Corporate Debtor vide order dated 29.05.2018 under section 2(1) (u) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Subject to provisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely: - (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgement, decree or order in any court of law, tribunal, arbitration panel or other authority; 7.5 It may be noted that during liquidation also, according to section 33(5) of the Code, no legal proceeding can be initiated against the corporate debtor. Accordingly, there is no question of alienating or attaching any of the assets of the corporate debtor. In fact, during liquidation, according to section 35(l)(b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al was unable to prepare an information memorandum, being one of the important documents for the purpose of the receipt of resolution plans and the NCLT ordered for liquidation of the corporate debtor by way of its order dated 14 September 2018. Now, it is loud and clear that IB Code is not a debt recovery tool. 7.7 In view of the foregoing discussions and reliance placed on the various judgments, this Adjudicating Authority is of the considered view, that provisions of section 238 of the IB Code override the Gujarat State GST Act 2017 and Central GST Act 2017. The Deputy Commissioner of State Tax, (Enforcement) Division-8, Surat is hereby directed to release the assets of M/s. Electra Accumulators Ltd., the Corporate Debtor, enabling the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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