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TMI Blog2022 (8) TMI 1436X X X X Extracts X X X X X X X X Extracts X X X X ..... 17. 2. Accordingly, the DGAP had vide his Report dated 28-10-2021 reported on all other projects of IGRPL and such Projects with brand name "IREO" in terms of section 171 of the CGST Act 2017 wherein he has inter alia stated that:- (i). All the projects of IGRPL, with the brand name "IREO" discussed in the I.O. 14/2019 have been taken up for investigation. Details of the same are tabulated in Table-A below. As the Occupancy Certificates covering the entire projects mentioned in serial No. 1 and 2 of the Table have been issued in the pre-GST period, hence both the projects were kept out of the purview of the investigation, and the projects mentioned at serial No. 9 & 10 of the table, have been concluded and report has been submitted to this Authority separately. Accordingly, the remaining six projects at serial Nos. 3 to 8 where Occupation Certificate has not been issued before GST implementation, the NOI has been issued on 15-1-2021 to look into the aspect of violation of provisions of section 171 of the Act. Therefore, the six remaining projects have been considered for investigation. TABLE-A Sl. No. Name of the Company Name of the Project Location Date of Occupat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d separately. (iv). On receipt of directions issued vide above said IO dated 21-10-2019, the DGAP had issued a Notice under rule 129 of the CGST Rules, 2017 on 15-1-2021, calling upon the Respondent to reply as to whether he admits that the benefit of input tax credit had not been passed on to the recipients by way of commensurate reduction in price and if so, to suo motu determine the quantum thereof and indicate the same in their reply to the Notice as well as furnish all supporting documents. (v). Accordingly, in response to the Notice dated 15-1-2021, the Respondent replied vide letters/e-mails dated 25-1-2021, 29-1-2021, 24-2-2021, and 16-7-2021 and submitted the following documents/information: (a) Brief profile of the Respondent. (b) Copies of GSTR-1 & GSTR-3B returns for the period July 2017 to Dec. 2020. (c) Copies of Tran-1 return for transitional credit availed by the Respondent. (d) Copies of ST-3 returns for the period October 2016 to June 2017. (e) Electronic Credit Ledger for the period July 2017 to Dec. 2020. (f) CENVAT/ITC register for the period 2017-18, 2019-20 & 2020-21. &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nput Tax credit has accrued to the Respondent and if so the said benefit of Input Tax Credit has been passed on to the homebuyers in whose case demands have been raised or advances have been received post-GST could not be concluded. (viii). The Respondent vide his letter dated 28-6-2021 submitted that Corporate Insolvency Resolution Process ("CIRP") had been initiated under the Insolvency and Bankruptcy Code, 2016 ("Code") against him vide Order dated 17-10-2018 passed by the Hon'ble National Company Law Tribunal ("NCLT"), New Delhi and the said CIRP has been concluded by the NCLT, New Delhi vide Order dated 1-6-2021 whereby the Resolution plan filed by the One City Infrastructure Pvt. Ltd. has been duly approved and subsequently implemented. Further, the Respondent has also submitted vide the reference cited above, that "In terms of the Resolution Plan, so approved, as the Department of Central Board of Indirect Taxes and Customs did not file any claim before the Resolution Professional, who had been appointed under the Code, therefore, the dues against Central Board of Indirect Taxes and Customs Department have been treated as 'NIL' and the plan has been duly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany, in relation to any period prior to the Plan Effective Date or arising on account of the acquisition of control by the Applicant over the Company pursuant to this Resolution Plan, shall stand terminated and withdrawn and all consequential liabilities, if any, shall stand extinguished and be considered as not payable by the Company or the applicant by virtue of the order of the NCLT approving this Resolution Plan and any reassessment, revision or other proceedings under the provisions of the Applicable Laws relating to taxes would be deemed to be barred in relation to any period prior to the Plan Effective Date, by virtue of the order of the NCLT approving this Resolution Plan. iii. Without prejudice all liabilities (including without limitation, for any tax, penalty, Interest, fines or fees) or obligations of the Company, in relation to; (A) any investigation, inquiry or show-cause, whether civil or criminal; (B) any Non-Compliance of provisions of any Applicable Laws, rules, regulations, directions, notifications, circulars, guidelines, policies, licenses, approvals, consents or permissions: (C) change of control, transfer charges, unearned increase compensation, or any oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent has further submitted that, as Resolution Plan is being approved and implemented, no assessment proceedings can continue against him and in terms of Insolvency and Bankruptcy Code, 2016 as well as various precedents of the Hon'ble Supreme Court of India, Hon'ble High Courts as well as Hon'ble NCLAT and Hon'ble NCLT and referred to Ultra Tech Nathdwara Cement Ltd. v. Union of India [2020] 116 taxmann.com 152/2020 (37) G.S.T.L. 289 (Raj.), whereby after implementation of the resolution plan, the Central Goods and Services Tax Department issued demand notices to the Corporate Debtor (CD) on the ground that the RP/CoC did not pay entire dues of the Department as claimed in the resolution process and they were not heard at the time of approval of resolution plan. The Hon'ble High Court of Rajasthan set aside the notices issued by the Department as illegal, stating that the fresh demand notices are illegal and arbitrary He had also referred to "The State of Haryana v. Uttam Strips Ltd. [Company Appeal (AT) (Insolvency) No. 319 of 2020, dated 23-6-2020]" wherein the Hon'ble NCLAT observed that the appellant had failed to file the claim before the RP and ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follows: "67. 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 by an appropriate forum in terms of section 60(6) of the Code, also militates against the rationale of section 31 of the Code. A successful resolution applicant cannot suddenly be faced with "undecided" claims after the resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution applicant who successfully take over the business of the corporate debtor. All claims must be submitted to and decided by the resolution professional so that a prospective resolution applicant knows exactly what has to be paid in order that it may then take over and run the business of the corporate debtor. This the successful resolution applicant does on afresh slate, as has been pointed out by us hereinabove." (xiv). The Hon'ble Supreme Court in Ghanshyam Mishra and Sons (P.) Ltd. (supra) has clearly held that no claims/dues may be entertai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lan." whereas Resolution plan "Any and all rights and entitlements of the Governmental Authorities including but not limited to the Central Government, the State Governments any regulatory of local authority or body or any agency or instrumentality thereof or any other party or entity (under any agreement, lease, license, approval, consent or permission) whether admitted or not, due or contingent, asserted or unasserted, crystallized or uncrystallized, known or unknown, disputed or undisputed, in relation to any period prior to the Plan Effective Date, shall be deemed to be permanently extinguished by virtue of the order of the NCLT approving this Resolution Plan and the Company or the Applicant shall at no point of time, directly or indirectly, have any obligation liability or duty in relation thereto". Although, the benefit of input tax credit had arisen consequent to introduction of GST as discussed supra is to be passed on to the homebuyers in whose case demands have been raised or advances have been received post-GST who are otherwise creditors to the Respondent, yet the position of law is that once a resolution plan is approved under the IBC, 2016 all claims and dues will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luded by NCLT vide its Order dated 1-6-2021 whereby the Resolution Plan filed by the M/s. One City Infrastructure Pvt. Ltd was duly approved and subsequently implemented. 5. DGAP has further observed that as per provisions of section 238 of the IBC, 2016 "the provisions of this code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law:" Although, it is argued that the provisions of section 171 of the CGST Act, 2017 have been violated by the Respondent, yet the provisions of IBC, 2016 will nonetheless prevail. 6. This Authority finds that, section 171 of the CGST Act, 2017 and the Rules made thereunder cast a three fold responsibility on this Authority viz. to ensure that that there shall be no profiteering in case of reduction of tax rates or availability of ITC to suppliers, to determine profiteered amount and to ensure that the profiteered amount so determined is returned/passed on along with interest to each recipient of such supply. 7. Hence, this Authority had vide its Interim Order No. 14/2019 dated 21-10-2019 directed the DGAP to conduct a specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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