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TMI Blog2024 (3) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... undue alacrity is getting orders for NCLT to defeat the rights of creditors of the petitioner. The Order passed by the National Company Law Board (NCLT) on 01.02.2019 approving the Corporate Insolvency Resolution Plan filed by Mr.Mahavir Chand Bafna, promoter of the petitioner Company on 20.12.2018 as a resolution applicant before the National Company Law Board (NCLT) CP/682(IB)/CB/2017 has also not disclosed the names of any of the financial creditors and the operational creditors and the details of discussion of the Committee of the Creditors (COC) before the Corporate Insolvency submitted by Mr.Mahavir Chand Bafna, the promoter of the petitioner - It merely states that the meeting of the Committee of Creditors (COC) was held on 27.09.2018, 30.11.2018 and 20.12.2018. It further records that the Committee of Creditors (COC) after deliberation approved the Corporate Insolvency Resolution Plan submitted by the Corporate debtor i.e. the promoter of the petitioner Mr. Mahavir Chand Bafna by passing the Resolution on 04.01.2019. NCLT as the Adjudicating Authority ought to have been careful before approving the Corporate Insolvency Resolution Process initiated by the promoter of the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the case of the petitioner that Assessments were deemed to have been completed earlier under Section 22 of Tamil Nadu Value Added Tax (TNVAT) Act, 2006 on 31.10.2015. They were however reversed later. It appears that an assessment order came to be passed on 24.12.2018 for the Assessment Year 2014-2015. 7. The petitioner herein was in arrears of tax both under the Central Sales Tax Act, 1956, Tamil Nadu Value Added Tax (TNVAT) Act, 2006. It appears that the petitioner had committed default. Therefore, one of the petitioner's Operational Creditor namely M/s.Aries Limited approached the National Company Law Tribunal under Section 9 of the Insolvency and Bankruptcy Code, 2016 read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. One Radhakrishnan Dharmarajan, who was appointed as a Resolution Professional by the National Company Law Tribunal (NCLT), Chennai in CP/682(IB)/CB/2017 in CP/682(IB)/CB/2017. 8. The National Company Law Tribunal (NCLT), Chennai passed an order on 16.07.2018 in CP/682(IB)/CB/2017. Thus, there was a Moratorium in-force with effect from 16.07.2018 under Section 14 of Insolvency and Bankruptcy Code, 2016 rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amt proposed to pay (Rs in Crs) 1 TDS Payable 0.21 0.05 0.01 2 Income Tax 1.99 0.05 0.1 3 Service Tax 0.27 0.05 0.01 4 Professional Tax 0.17 0.05 0.01 Total 2.64 0.13 14. As far as the contingent liabilities is concerned, the resolution applicant, the promoter of the petitioner namely Mr.Mahavir Chand Bafna stated that the Central Sales Tax liability due to non-submission of Forms and the Input Tax Credit is 0.53 Crores (Rs. 53,00,000/-) between March 2014 and June 2018 and same will not be paid. Further, in the Resolution Plan, it was stated that the case shall get disposed on account of the settlement of claims under the Resolution Plan. 15. Relevant portion of the Resolution Plan, sanctioned by the NCLT on 01.02.2019 reads as under : - The Disputed Legal Case against the Company as on 30th June 2018 are given in Annexure E which amounts to Rs. 11.81 Crs. For the Purpose of the Resolution Plan, the liability arising out of the said case, if any, is being considered as deemed crystallised as on the Resolution Plan Approval Date. Hence, the RA is not disputing the above liabilities any further and instead considering them as deemed crystallised and admitted. Simultaneously, the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch appears to have been affirmed by the Hon'ble Supreme Court is not binding on the Commercial Tax Department as the Commercial Tax Department had no notice on the same. 22. It is further submitted that this Court in Aircel Cellular Limited case while dealing with the case under the Income Tax Act, has considered the decision of the Hon'ble Supreme Court in Ghanashyam Mishra and Sons Private Limited case (referred to supra) and has held as under : - 35. Therefore, Corporate Insolvency Resolution Plan sanctioned and approved cannot impinge on the rights of the Income Tax Department to pass any fresh Assessment Order under Section 148 read with Sections 143(3) and 147 of the Income Tax Act, 1961. 36. Therefore, the proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC) cannot be pressed into service to dilute the rights of the Income Tax Department under the Income Tax Act, 1961 to re-open the assessment under Section 148 of the Income Tax Act, 1961. 37. In my view, the Income Tax Department was not precluded from reopening the assessment completed under Section 143(3) of the Income Tax Act, 1961. 38. Therefore, these Writ Petitions filed by these petitioners have t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jarat Value Added Tax (Amendment) Act, 2007. Hence, this Writ Petition is liable to be dismissed. 26. The learned Additional Advocate General further submitted that the petitioner should be directed to pay the amount that has been demanded in the impugned demand notices as the Commercial Tax Department was not informed about the Corporate Insolvency Resolution Plan which has been filed by the Resolution Applicant namely Mahavir Chand Bafna. 27. In the Counter that has been filed by the respondent, it has been stated that for the assessment year 2013-14, 2014-15 and 2015-16, orders passed under CST Act and subsequent filing of statutory declaration forms, the assessments were revised. The arrear related to the assessment years 2013-14. 2014-15 and 2015-16 under the CST Act based on assessment passed for non submission of C forms. The arrears relating to the years 2013-14 and 2014-15 under VAT Act arrived due to non-reversal of ITC on non-filing of C form for the years 2013-14 and 2014-15. The petitioner was in arrears of Rs. 2,13,98,958/- under CST Act alone as on 31.01.2019. 28. It is further stated that subsequently based on the forms submitted this respondent had revised the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner was crystalized as Rs. 11,35,353/-. 34. The NCLT vide its dated 16.07.2018 appointed, Mr.Gopalaswamy Ganesh Babu, as an Interim Resolution Professional (IPR). In view of the above order. Thus, a moratorium under Section 14 of the Insolvency Bankruptcy Code, 2016 was in force with effect from the same date i.e. 16.07.2018. Moratorium order dated 16.07.2018 of NCLT prohibited the following :- (a) The institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, Tribunal, Arbitration Panel or other authority. (b) Transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; c) Any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002(54 of 2002); (d) The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor . 35. The sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operations Statutory Liabilities 2.64 0.13 Statutory liabilities where no set off option is there are also proposed to be paid 5% a small amount despite lower ranking amongst stakeholders and no recovery potential under liquidation scenario Other Liabilities 0.21 0.01 Other Liabilities have been proposed to pay 5%, given the insufficient cash visability for all stakeholders Contingent and Disputed Liabilities 22.07 - Contingent and disputed liabilities, dispute legal cases, have been assumed as deemed admitted and proposed to be paid NIL Value. Equity Shareholders 23.66 2.36 Equity shareholders being the highest class of risk takers and last one to recover money in business are proposed to have capital reduction of 90% their existing shareholding continue to hold balance 10% as a Shareholder of the Corporate Debtor. The liability of the petitioner to the respondent Commercial Tax Department form part of the contingent liability 40. The liability for the Commercial Tax Department has been shown as a contingent liability as per financial on 30.06.2018 as below:- j) Resolution for Disputed Legal case and Contingent Liabilities The Contingent Liabilities as per financials as on 30th J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oter of the petitioner and approved by the National Company Law Board (NCLT) vide its order dated 01.02.2019 shows several discrepancies. 46. The Order passed by the National Company Law Board (NCLT) on 01.02.2019 approving the Corporate Insolvency Resolution Plan filed by Mr.Mahavir Chand Bafna, promoter of the petitioner Company on 20.12.2018 as a resolution applicant before the National Company Law Board (NCLT) CP/682(IB)/CB/2017 has also not disclosed the names of any of the financial creditors and the operational creditors and the details of discussion of the Committee of the Creditors (COC) before the Corporate Insolvency submitted by Mr.Mahavir Chand Bafna, the promoter of the petitioner. 47. It merely states that the meeting of the Committee of Creditors (COC) was held on 27.09.2018, 30.11.2018 and 20.12.2018 . It further records that the Committee of Creditors (COC) after deliberation approved the Corporate Insolvency Resolution Plan submitted by the Corporate debtor i.e. the promoter of the petitioner Mr. Mahavir Chand Bafna by passing the Resolution on 04.01.2019 . 48. It is curious note that paltry for a sum of Rs. 11,35,353/- due to the so called operating creditor, pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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