9911796707
TMI Blog2024 (5) TMI 728X X X X Extracts X X X X X X X X Extracts X X X X ..... Alok (SC7) Mr. Vikash Kumar SC-11 (In Civil Writ Jurisdiction Case No. 2597 of 2024) For the Petitioner/s : Mr.Siddhartha Prasad, Advocate For the Respondent/s : Mr. Vikash Kumar SC-11 JUDGMENT ( Per : HONOURABLE THE CHIEF JUSTICE ) The petitioner; a Company registered under the Companies Act, 1956 is now subjected to a Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (for brevity 'IBC'). In the two writ petitions, the petitioner challenge the demand raised under the Bihar Goods and Services Tax Act, 2017 (for brevity 'BGST Act') for the assessment years 2020-21 and 2022-23; as having been extinguished for reason of the State Tax Authorities not moving the National Company Law Tribunal (for brevity 'NCLT') for inclusion of their demand in the resolution plan, as a debt payable by the Company-a Corporate Debtor under the IBC. 2. Mr. Gopal Jain, learned Senior Counsel for the petitioner in his arguments laid thrust on the creditor driven regime as is brought out under the IBC. The Corporation Bank a Financial Creditor, as is distinguished from an Operational Creditor; which the State Government would have been if the claims were ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court in Ghanshyam Mishra & Sons Private Ltd., Vs. Edelweiss Asset Reconstruction Company Ltd.; (2021) 9 SCC 657, which specifically noticed the amendment brought to the IBC in the year 2019 by which the resolution plan was made binding on the Central Government, State Government and local authorities to whom a debt is owed under any law; which includes the tax authorities. It has been held by a three Judge Bench that the claims provided in the resolution plan would stand frozen and would be binding on the Corporate Debtor, its employees, members, creditors including Central Government and the State Government or any local authority and as on the date of approval of the resolution plan all claims which are not part of the resolution plan shall stand extinguished. It was categorically held that none would be entitled to initiate or continue any proceeding in respect of a claim, which is not a part of the resolution plan. The State Government had not approached the NCLT despite the initiation of the proceedings; which was notified by public notice and also in the website of the Registrar of Companies. The State Government having not taken recourse to the remedy available, for inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... editor was admitted by the NCLT on 03.01.2020, till the resolution plan was approved on 10.05.2022. One of the assessment years, which is the subject matter of the litigation, i.e. 2021-22, was within the period of such moratorium and the other assessment year 2022-23 commenced while the moratorium was in force and ended only after the resolution plan was approved as per Annexure-P/3. The learned Government Advocate has specifically pointed out that under Section 31 of the BGST Act a notice was issued on 08.09.2020, which was responded to by the assessee on 03.11.2022. An intimation dated 22.11.2022 was communicated followed up with the show cause notice dated 15.11.2022. The assessment order was passed on 04.03.2023 and an Appeal was filed on 18.04.2023 which was rejected on 12.08.2023 while the moratorium was in force. Obviously, the State Taxes Department could not have taken any proceedings during the moratorium and the assessment had to be completed within the time provided under the BGST Act. 9. It is emphasized that under Section 82 of the BGST Act there is a statutory charge created on the assets of the assessee with respect to any tax, interest, penalty or other dues paya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments with respect to extinguishment of tax on a resolution plan being approved by the NCLT would, according to the learned Senior Counsel, settle the issue and there is no requirement to put forth the arguments on annuity. We are hence called upon to decide only the issue of extinguishment of the claim as raised by the Taxes Department. 13. The petitioner was incorporated as a Special Purpose Vehicle to carry out the work of upgradation of Hazipur-Muzaffarpur section of the existing NH-77 within the State of Bihar on Build Operate and Transfer (BOT) (annuity-basis) under the National Highway Development Project Phase-III. The agreement executed by the petitioner with the NHAI is produced as Annnexure-P/1 dated 24.02.2010. It was by Annexure-P2 dated 03.01.2020 that the NCLT, New Delhi, admitted the petitioner into the CIRP in terms of the IBC. An interim resolution professional was appointed, who was later confirmed as the resolution professional. M/s Silver Point Luxemburg Platform had made the resolution plan as an R.A. and by Annexure-P/3 dated 10.05.2024, the resolution plan submitted by the R.A. through the R.P. was approved. A monitoring committee was also constituted whose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. The 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 the 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, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the adjudicating authority grants its approval under Section 31 could be continued." 17. Apposite, would also be, reference to paragraph no. 14 of the decision in Ruchi Soya (supra), which is extracted hereinbelow: - "14. Admittedly, the claim in respect of the demand which is the subject- matter of the present proceedings was not lodged by respondent No. 2 after p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e back seat as is evident from Section 53 of the IBC which comes into play in the liquidation proceedings, on failure of the resolution process. The State or the Central Government or any local authority definitely is reserved with the right to approach the Resolution Professional with their claims which the Resolution Professional is obliged to include in the resolution plan. There is also an appeal provided from the order of the NCLT to the National Company Law Appellate Tribunal which can be availed by any creditor whose claims have not been included by the resolution professional. 20. In this context we have to examine the decisions relied upon by the State juxtaposed with the facts as coming out in the two assessment years. Compelling reliance is placed on Rainbow Papers (supra) wherein, the NCLAT dismissed the appeal filed by the State Tax Officer, against an order of the NCLT, rejecting an application seeking the tax demand under the Gujarat Value Added Tax Act, 2003 to be the first charge over the property of the Corporate Debtor. Certain dates are relevant; which we would refer to briefly. The date of admission of the company petition by the NCLT, which petition was made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g authority; the NCLT. The State does not have a case that they have approached the R.P. within the period provided and before the resolution plan was approved by the COC and then by the NCLT. There is no recovery initiated or assessment order passed before the resolution plan is approved. There is also no appeal filed before the NCLAT by the State. The writ petitions before us are by the Corporate Debtor who is undergoing CIRP; against the demand raised and the recovery attempted to be enforced as against the dues under the BGST Act for two assessment years, which is not at all a part of the claim before the R.P. or included in the resolution plan. The decision in Rainbow Papers Ltd (supra) has no application in the present case. 23. PVVNL (supra) was with respect to a liquidation process as was specifically noticed by the Division Bench, while Rainbow Papers (supra) was in the context of a resolution process. In PVVNL (supra) the challenge was to the order of the NCLT directing the District Magistrate and Tehsildar, Muzaffarnagar to release the property attached for the electricity dues of the Corporate Debtor, payable to PVVNL. Therein also PVVNL raised the claim of statutory f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Papers. We have already held that Rainbow Papers (supra) do not apply to the facts of the present case and hence PVVNL (supra) and the reservation made therein from the earlier decision of a co-ordinate bench as also the reaffirmation of the principles in Rainbow Papers (supra) in Sanjay Kumar Agarwal (supra) is of absolutely no avail in deciding the issue raised in the present case. 26. We have found for a fact that, the tax dues for the respective assessment years were not included in the resolution plan. The State has not challenged the resolution plan by way of an Appeal or a proceeding before this Court. The resolution plan has been approved on 10.05.2022 and before that the State has not approached the R.P. or the NCLT. 27. In the above circumstances, we have to follow the consistent declaration of law made by the Hon'ble Supreme Court in Ghanshyam Mishra, CoC of Essar Steel India Limited and M/s Ruchi Soya (all supra) and the demands raised by the assessment orders, of tax due for the years 2020-21 and 2022-23 stands extinguished; subject only to the contingency of a liquidation proceeding if the resolution plan fails. 28. Both the writ petitions are allowed restraining t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
