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TMI Blog2020 (5) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... rned by the provisions of the IB Code. There are force in the submissions of the learned Additional Advocate General that the tax amount, which had been sought to be realised from the petitioner Company, had already been realised by the petitioner Company from the customers which was to be deposited in the Government Exchequer, but that having not been done by the Company and the amount having been utilized for its business purposes, throughout after the years 2011-12 and onwards, shall certainly amount to criminal misappropriation of the Government money by the Company, and the State Government is entitled to realize the same with the penalty due thereon. It is also found that the re-assessment orders were passed on 17.08.2018 as contained in Annexure-3 to the writ applications, by which date the resolution plan was already approved by the NCLT on 17.04.2018, but the same was never brought to the knowledge of the Commercial Tax officials by the Company, even though the petitioner Company was given a hearing by the Assessing Authority, i.e., respondent No. 4 Assistant Commissioner of State Tax, Bokaro Circle, Bokaro, before passing the re-assessment orders - also, the notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Petition dismissed. - W.P.(T). No. 6324 of 2019 With W.P.(T). No. 6325 of 2019 With W.P.(T). No. 6326 of 2019 With W.P.(T). No. 6327 of 2019 - - - Dated:- 1-5-2020 - HON BLE MR. JUSTICE H. C. MISHRA HON BLE MR. JUSTICE DEEPAK ROSHAN For the Petitioner : M/s. Dharshan Poddar Mishra, Manav Poddar and Deepak Kumar Sinha, Advocates For the State : Mr. Manoj Tandon, A.A.G. For the Respondent Bank : Mr. P.A.S. Pati, Advocate Mr. Hemant Jain, Advocate H. C. Mishra, J. - As common questions are involved in all these writ applications, they have been heard together and are being disposed of by this common Judgment. 2. Heard learned counsel for the petitioner, learned Additional Advocate General for the respondent State and learned counsel for the respondent Bank. 3. In all these writ applications, the petitioner Company has challenged the garnishee order bearing No.727 dated 21.11.2019, issued under Section 46 of the Jharkhand Value Added Tax Act, 2005 (hereinafter referred to as the 'JVAT Act'), as contained in Annexure-4 to the writ applications, issued by the respondent No.3, Deputy Commissioner of Commercial Taxes, Bokaro Circle, Bokaro, to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 133-9081 of 2019, in which the Hon ble Apex Court, vide order dated 27.11.2019, sent the matters back to the NCLT, observing We make it clear that the implementation of the Resolution Plan is not stayed . According to the petitioner's case, upon approval of the Resolution Plan, M/s. Vedanta Limited took over the management of the petitioner Company on 04.06.2018. According to the petitioner, since no claim was made by the State Government as regards the aforesaid tax liability in the corporate insolvency resolution process, the claim of the Government is now barred under Section 31 of the IB Code, and the amount cannot be realised by the State Government, as the State Government shall also be deemed to be the operational creditor under Section 5 (20) of the IB Code. According to the petitioner s case, once the resolution plan was approved, the tax liability of the petitioner Company which was not claimed by the State Government during the corporate insolvency resolution process, stood completely barred under Section 31 of the IB Code. 5. Admittedly, in the present writ applications, there is no challenge to the tax liabilities of the petitioner Company, though the re-ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that even the tax liabilities payable to the Government would come within the meaning of the expression operational debt under Section 5 (21) of the IB Code, making the Government an operational creditor in terms of Section 5(20) thereof, and shall be governed by the approved resolution plan. In support of his contention learned counsel has placed reliance upon the decision of the Hon ble Apex Court in Embassy Property Developments Pvt. Ltd. Vs. State of Karnataka Ors., reported in Manu/SC/1661/2019, wherein it has been held as follows:- 36. ----------------. Let us take for instance a case where a corporate debtor had suffered an order at the hands of the Income Tax Appellate Tribunal, at the time of initiation of CIRP. If Section 60(5) (c) of IBC is interpreted to include all questions of law or facts under the sky, an Interim Resolution Professional/Resolution Professional will then claim a right to challenge the order of the Income Tax Appellate Tribunal before the NCLT, instead of moving a statutory appeal under Section 260A of the Income Tax Act, 1961. Therefore, the jurisdiction of the NCLT delineated in Section 60(5) cannot be stretched so far as to bring a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted by the learned counsel for the petitioner that had the claim of the State Government been made at the stage of the corporate insolvency resolution process, even in that case, the claim of the State Government could have been settled only in the manner prescribed in the resolution plan as approved by the Adjudicating Authority namely the NCLT, but in the present case, as no such claim was made by the State Government at the time of corporate insolvency resolution process, the claim of the State Government now stands completely barred under Section 31 of the IB Code, and after the approval of the resolution plan, no fresh claim can be entertained. In support of this connection, learned counsel has placed reliance upon the decision of the Hon ble Apex Court in Committee of Creditors of Essar Steel India Limited, through authorized Signatory Vs. Satish Kumar Gupta Ors., reported in 2019 SCC OnLine SC 1478, wherein it has been held as follows:- 88. For the same reason, the impugned NCLAT judgment in holding that claims that may exist apart from those decided on merits by the resolution professional and by the Adjudicating Authority/Appellate Tribunal can now be decided b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility, and as such, these writ applications cannot be entertained on this score as well. It is submitted by learned AAG that the case of the petitioner does not fall within the categories of cases in which the alternative remedy is not a bar for exercising the writ jurisdiction. In support of his contention learned AAG has placed reliance upon the decision of the Hon'ble Apex Court in Harbanslal Sahnia Anr. Vs. Indian Oil Corpn. Ltd. Ors., reported in (2003) 2 SCC 107 , laying down the law as follows:- 7. -----------. In an appropriate case, in spite of availability of the alternative remedy, the High Court may still exercise its writ jurisdiction in at least three contingencies: (i) where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is failure of principles of natural justice; or (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged. ----------. 16. It is also pointed out by the learned AAG that admittedly, the petitioner Company had collected the tax from its purchasers / customers in the name of VAT, but has not deposited the same in the Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 12.00 lacs on 02.12.2019 and (c) ₹ 61.00 lacs on 3.12.2019. 20. In reply, learned counsel for the petitioner Company has placed stress upon paragraph 3.6 of the resolution plan, which has been brought on record as Annexure-1 to the writ applications, wherein it is stated that all the claims of taxes and liabilities whether admitted or not, due or contingent, whether or not set out in the provincial balance sheet, shall stand extinguished by virtue of the order of the NCLT, approving the resolution plan, and the Company shall not be liable to pay any tax against such dues, and such liabilities shall stand extinguished and be considered as not payable by the Company by virtue of the order of the NCLT, approving the resolution plan. Learned counsel has submitted that the resolution plan of the company, now stands approved up to the Hon ble Apex Court, by virtue of the order dated 27.11.2019 passed in Civil Appeal Nos.1133-9081 of 2019. Learned counsel accordingly, reiterated that the taxes, even if accrued in the years 2011-12 and 2012-13, can no more be realized from the petitioner Company after approval of the resolution plan by the NCLT. 21. Having heard the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ishee order has been issued, may not come within the definition of operational debt , as defined in the IB Code. The decisions cited by learned counsel for the petitioner in Embassy Property Developments Pvt. Ltd.'s case (supra) and in Monnet Ispat and Energy Ltd.'s case (supra), are of no help to the petitioner Company, as they related to Income Tax dues, which were the direct debts of the corporate debtors in those cases. 24. We also find from the record that the re-assessment orders were passed on 17.08.2018 as contained in Annexure-3 to the writ applications, by which date the resolution plan was already approved by the NCLT on 17.04.2018, but the same was never brought to the knowledge of the Commercial Tax officials by the Company, even though the petitioner Company was given a hearing by the Assessing Authority, i.e., respondent No. 4 Assistant Commissioner of State Tax, Bokaro Circle, Bokaro, before passing the re-assessment orders. 25. We also find from the record that the notice under Section 13 of the IBC Code was never published in the State of Jharkhand, rather the notice was published only in the Business Standard of Kolkata Edition on 24.07.2017 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the petitioner Company is at Ranchi, and its principal place of business is in the District of Bokaro, both of which are situated in the State of Jharkhand, but no public announcement of the corporate insolvency resolution process was made in the State of Jharkhand. We are conscious of the fact that since the resolution plan is approved by the NCLT, and not interfered with even by the Hon'ble Apex Court as pointed out above, we are not required to look into the legality or otherwise of the resolution process, but the fact remains that due to non publication of the public announcement of the corporate insolvency resolution process in the State of Jharkhand, the authorities of the Commercial Taxes Department had no occasion to have any knowledge about the corporate insolvency resolution process of the Company, and they were deprived of making their claim before the interim resolution professional. Since the State Government was not involved in the resolution process, the resolution plan cannot be said to be binding on the State Government under Section 31 of the IB Code, relevant portion of which reads as follows:- 31. (1) If the Adjudicating Authority is satisfied that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thored by my esteemed Brother H.C. Mishra, J. I fully subscribe to the views expressed therein, but I also wish to add a few reasons of my own, which are as follows:- (i). Much has been argued by the learned counsel for the petitioner Company that since no claim was made by the respondent State as regards the tax liability in the corporate insolvency resolution process, the claim of the tax authority is barred under Section 31 of the IB Code. In this regard, even at the cost of repetition it is pertinent to mention few dates. The petitioner Company was originally assessed to tax for the period 2012-13 u/s 35(6) of the VAT Act vide order dated 21.01.2016. The said assessment order was challenged by the petitioner Company by way of revision, being Revision Case No. CC(S)-311 of 2016. The revision case was disposed on 11.08.2016 and the assessment order dated 21.01.2016 was set aside and the case was remanded back to lower Court for passing the order afresh. Subsequently, the revised assessment order was passed on 17.08.2018. Thus, from 11.08.2016 till 17.08.2018, there was no dues standing against the petitioner Company and as such there was no occasion to make any claim by the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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