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TMI Blog2023 (8) TMI 487X X X X Extracts X X X X X X X X Extracts X X X X ..... slate. The operational creditors or the other stakeholders squarely cover the Central Government, any State Government or any local authorities, including tax authorities. As per the position of law declared in the case of Ghanshyam Mishra, in case of all such debts owed to the Central Government, any State Government or any local authority including tax authority, once a resolution plan is approved all such claims etc which were not a part of the resolution process shall stand extinguished. The impugned assessment orders, assessment notices and demand notices dated 14.2.2019, 16.2.2019, 20.07.2020, 18.07.2020 and orders dated 22.1.2021 are quashed and set aside - petition allowed. - HONOURABLE MR. JUSTICE BIREN VAISHNAV AND HONOURABLE MR. JUSTICE DEVAN M. DESAI Appearance: For The Petitioner(S) No. 1 : Mr. Jay S Shah(7244) For The Respondent(S) No. 1,5 : Ms Shrunjal Shah, Asst Government Pleader For The Respondent(S) No. 2,3,6,7,8 : Notice Served For The Respondent(S) No. 4 : Notice Unserved ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE BIREN VAISHNAV) 1. Rule returnable forthwith. With the consent of the learned advocates f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondents vide notice dated 16.2.2019 and letter dated 6.3.2019. The petitioner informed the respondents that in accordance with the resolution plan as approved by the order dated 14.11.2018, all litigations pertaining to the petitioner prior to the transfer date would stand withdrawn without any further act, instrument and the petitioner would be immune for attachment or interference. Reliance was placed on Section 31 of IBC and Section 238 of the IBC to submit that all liabilities would stand discharged. 2.5 A demand notice dated 18.7.2019 was received for tax dues of the FY 2016-2017. Thereafter, on 22.01.2021 assessment order was passed whereby respondent no. 5 confirmed demands of interest in lieu of delayed payment of GVAT and CST for the period from 1.4.2016 to 1.11.2016. 3. Mr. Jay Shah, learned advocate for the petitioner would submit that all the impugned notices and orders were bad once the Resolution Plan was in place and the Resolution Plan provided clauses especially 6.2.3.5 in respect of operation creditors like the respondents herein which proved exemption. 3.1 Mr. Shah, learned counsel for the petitioner would submit that in terms of the Resolution Plan, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d allied products. 17. On 19.12.2015, the Additional Commissioner, Commercial Tax, Ghaziabad passed an order in the appeal preferred by M/s Binani Cement Limited, thereby, allowing the appeal filed by Binani Cement and setting aside the order of imposition of fine of Rs. 24,71,885/. Vide another order dated 22.12.2015, passed in the appeal filed by Binani Cement, the order of imposition of fine of Rs. 59,61,445/ also came to be set aside. Vide order dated 2.8.2017, the Deputy Commissioner, Commercial Tax, Division 10, Ghaziabad held, that Binani Cement was liable to pay Entry Tax of Rs. 40,47,344/ for the Assessment Year 20032004. By another order dated 2.8.2017, the Deputy Commissioner, Commercial Tax, Division 10, Ghaziabad further held, that Binani Cement was liable to pay Entry Tax of Rs. 43,06,715/ for the Assessment Year 20042005. 18. Since the said Binani Cement was unable to pay the debt to Bank of Baroda, the Bank of Baroda filed an application being C.A. (IB) No. 359/KB/2017 before NCLT, Kolkata Bench under Section 7 of I B Code. Vide order dated 25.7.2017, NCLT admitted the petition for initiating the CIRP process. Vide the said order, NCLT also declared mora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the following endorsements came to be made by the authority on 29.4.2019: After consideration on application presented by you, it is found that, by Hon ble NCLT/NCLAT after transfer, neither stay is imposed on tax assessment nor on creation of demand. So the created demand is payable by you. If you are not agree with it, preferring appeal before higher authority, present its copy to us. Disposal is done of application presented by you. _______ 23. The Commercial Tax Department of the State of Rajasthan filed Civil Appeal No. 5889/2019 challenging the Resolution Plan. However, the said appeal came to be dismissed vide order of this Court dated 26.7.2019. The appeals being Civil Appeal Nos. 630634/2020 were also preferred by the Commissioner of Central Excise, Goods and Services Tax, Jodhpur challenging the Resolution Plan. The same also came to be dismissed by this Court vide order dated 24.1.2020. 24. The appellant therefore filed a Civil Miscellaneous Writ Petition No. 354/2020 before the High Court of Allahabad challenging the order passed by the Additional Commissioner Grade 2 (Appeal) dated 30.1.2020, to the effect, that the proceedings in the State of U.P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of which the proceedings under Section 7 were initiated by the SBI. Vide order dated 21.7.2017 of NCLT, the application filed by SBI was admitted and Mr. Dhaivat Anjaria was (2020) 8 SCC 531 appointed as Interim Resolution Professional (IRP). In its meeting dated 21.8.2017, CoC approved the appointment of IRP as RP. In response to the invitation for submission of resolution plans, four applicants had submitted their Resolution Plans. CoC had approved the Resolution Plan of Vedanta Limited by 100% voting share. 28. NCLT vide order dated 17.4.2018 approved the Resolution Plan of Vedanta Limited. The appeal being Company Appeal (AT) (Insolvency) No. 175/2018 filed by one Renaissance Steel India Private Limited challenging the order of NCLT came to be dismissed by NCLAT vide order dated 10.8.2018. Challenging the notices issued by the respondent State Authorities and the order of SBI asking it to pay an amount of Rs. 37,41,41,602/ on account of tax penalty due under the Jharkhand VAT Act for the period 201112 and 2012 13, the appellant approached the High Court of Jharkhand. The appellant had also challenged the letter dated 22.11.2019 issued by State Tax Officer, Bokaro to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hallenged before this Court by the Revenue Authorities of the Rajasthan State as well as the Commissioner of Central Excise (GST), Jodhpur and this Court had refused to interfere with the order passed by NCLAT. It is submitted, that in this background, the authorities are totally unjustified in continuing the proceedings, which are undisputedly with respect to the dues prior to admission of the application under Section 7 of I B Code, only on the ground, that there is no specific stay order passed by NCLT. 42. He submitted, that the High Court has erred in refusing to entertain the writ petition of the appellant solely on the ground, that an alternative remedy by way of a second appeal was available to the appellant. He submitted, that in catena of judgments, this Court has held, that non exercise of jurisdiction under Article 226, despite availability of alternative remedy is a rule of self-restraint and in the appropriate areas carved out by this Court, entertaining a petition under Article 226, despite availability of alternative remedy, would be permissible. He submitted, that applying the said principle, the proceedings before the authority since stand prohibited in view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There is also this question about indemnity for successful resolution applicant. The amendment now is clearly making it binding on the Government. It is one of the ways in which we are providing that. The Government will not raise any further claim. The Government will not make any further claim after resolution plan is approved. So, that is going to be a major, major sense of assurance for the people who are using the resolution plan. Criminal matters alone would be proceeded against individuals and not company. There will be no criminal proceedings against the successful resolution applicant. There will be no criminal proceedings against successful resolution applicant for fraud by previous promoters. So, I hope that is absolutely clear. I would want all the hon. Members to recognize this message and communicate further that this Code, therefore, gives that comfort to all new bidders. So now, they need not be scared that the taxman will come after them for the faults of the earlier promoters. No. Once the resolution plan is accepted, the earlier promoters will be dealt with as individuals for their criminality but not the new bidder who is trying to restore the company. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lusions of the Supreme Court in the case of Ghanshyam Mishra (supra) read as under: 102. In the result, we answer the questions framed by us as under: 102.1 That once a resolution plan is duly approved by the Adjudicating Authority under sub section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan; 102.2 2019 amendment to Section 31 of the I B Code is clarificatory and declaratory in nature and therefore will be effective from the date on which I B Code has come into effect; 102.3 Consequently all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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