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TMI Blog2025 (2) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... BER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER For the Appellant : Shri Sandeep Nagpal, Advocate For the Respondent : Shri Rajesh Kumar Dhanesta, Sr. DR ORDER PER ANUBHAV SHARMA, JM: This appeal is preferred by the Revenue against the order dated 30.03.2024 of the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (hereinafter referred as Ld. First Appellate Authority or in short Ld. 'FAA') in appeals No.NFAC/2017-18/10082780 arising out of the appeal before it against the order dated 27.09.2021 passed u/s 143(3) r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred as 'the Act') by the National Faceless Assessment Centre, Delhi (hereinafter referred to as the Ld. AO). 2. On hearing both the sides it comes up from the facts stated before us by Ld. AR that GAIL Mangalore Petrochemicals Ltd. (previously known as JBF Petrochemicals Limited) (hereinafter referred to as "the Respondent Company") was set up in September 2008 to operate a planned 1.25 million metric tonnes per year purified terephthalic acid (PTA) plant at Mangalore, Karnataka. The plant, a backward integration project of the Respondent Company's polyester plant, was about to be commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... framework governing the CIRP. However, on request of the prospective resolution applicants, the CoC in its meeting held on 24.06.2022 resolved to extend the period of submission of resolution plan to 08.08.2022. In the same meeting, the CoC also passed a resolution for extension of CIRP period by another 90 days and for filing of the application under section 12(2) of IBC before the NCLT in this regard. In view of the same, the RP filed an application before the NCLT, and on 07.07.2022, the NCLT was pleased to extend the CIRP period. Subsequently, in view of the above ongoing process, the CoC, in its meeting, resolved to further extend the deadline for submission of the resolution plan to 30.08.2022. 7.1 On 01.09.2022, the RP informed the CoC that three resolution plans were received from following prospective resolution applicants: i Consortium of Indian Oil Corporation Limited and ONGC Limited ("IOCL-ONGC Consortium"); ii MPCI Private Limited ("MCPI"); and iii GAIL (India) Limited ("GAIL"). 7.2 After evaluating in terms of both qualitative and quantitative criteria, on 15.10.2022, the CoC approved the Resolution Plan submitted by GAIL with 100% voting share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Department, holding that the Resolution Plan had been approved following due process under the IBC, and was binding on all the stakeholders, including statutory authorities, as provided under Section 31 of the IBC. The NCLAT also observed that the Income Tax Department had been given an opportunity to raise claims or objections during the CIRP as well as again while hearing IA 899/22, but no submissions/ objections were made by the Income Tax Department at the relevant stages. The NCLAT further held that the IBC, being a special statute, overrides other laws, including claims for statutory dues under general law, and once a Resolution Plan is approved, such claims are extinguished to the extent provided in the plan. The NCLAT reaffirmed that the Resolution Plan could be implemented as per the framework approved by the NCLT, with no further interference warranted. The copy of NCLAT order dated 15.10.2024 is filed before us at page 112 to 135 of the Paper Book. 12. Ld. AR has drawn attention to the relevant clauses of the Resolution Plan, dealing with the treatment of government/ statutory dues, made available at page 59 to 60 of PB: "4.4. Treatment of Government/ Statutory Dues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int of time, directly or indirectly, have any obligation, liability or duty in relation thereto." 13. Now what is relevant is that as per the Resolution Plan, the Effective Date shall mean the date of approval of the Resolution Plan by the NCLT and as per the Resolution Plan, the Closing date shall mean 89 (eighty-nine) days from the Effective Date. Resolution Plan provided for two assurances to the Resolution Applicant (i.e. GAIL) of the Respondent Company: a) All proceedings under the Act, pending on the date of approval of Resolution Plan by the NCLT (unless otherwise specifically stated/ agreed to/ dealt with in the Resolution Plan), relating to any period prior to that date, shall stand terminated, and all consequential liabilities/ demand, if any, shall stand abated; and b) All dues under the Act, in relation to any period prior to the Closing date (i.e. 89 days from the date of approval of Resolution Plan by the NCLT) shall stand extinguished and the Respondent Company shall not be liable to pay any amount against such demand. In other words, any dues/ demands raised even subsequent to the date of approval of the Resolution Plan (but within 89 days therefrom) shall als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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; (ii) ... (iii) 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 NCLT grants its approval under Section 31 could be continued. " (Emphasis supplied) 15. The similar view has been taken by the Hon'ble Supreme Court in the case of Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta and Ors. (2019) (16 S.C.R. 275) (SC). It has been held by the Hon'ble Supreme Court that: "67. For the same r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pugned Assessment Order and Demand Notice both dated 12.12.2019. Similarly, in the other writ petition WP(C) 10628/2022, the impugned notices and orders were issued by the respondents/revenue much subsequent to the public announcement dated 30.09.2019 of commencement of CIRP under Section 13 of the Code; vide order dated 21.02.2022, the Tribunal approved the final Resolution Plan and that order was communicated by the petitioner/ assessee to the respondents/revenue, calling upon the latter to withdraw the earlier notices, but to no avail. 9. In nutshell, the Resolution Plans qua the petitioners/ assessees having been approved by the National Company Law Tribunal on 05.11.2019 (in WP(C) 10528/2022) and on 21.02.2022 (in WP(C) 10628/2022), the tax claims pertaining to the Assessment Year 2017-18 (in WP(C) 10528/2022) and Assessment Year 2014-15 (in WP(C) 10628/2022) stood extinguished. 10. The argument on behalf of respondents/revenue that being the State exchequer, it cannot be bound by the Resolution Process provisions of the Code has been recorded only to be rejected in view of the above quoted extract from the judgment in the case of Ghanshyam Mishra (supra).'' 17. The si ..... X X X X Extracts X X X X X X X X Extracts X X X X
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