Dismissed appeals due to non-compliance with NCLT permissions & IBC Section 14

The Tribunal dismissed all appeals filed by both the revenue and the assessee due to non-compliance with NCLT permissions, the applicability of Section 14 of the Insolvency and Bankruptcy Code, and adherence to monetary limits set by Circular No. 17/2019. The appeals by the revenue against the corporate debtor were considered suits falling within the ambit of Section 14, thus not allowed during the moratorium period. The Tribunal emphasized the binding nature of resolution plans under the IBC, leading to the dismissal of the revenue's appeals.

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Issues:
1. Interpretation of Section 14 of the Insolvency and Bankruptcy Code, 2016 regarding the continuation of appeals during the moratorium period.
2. Validity of appeals filed by the revenue against the company during the moratorium period.
3. Validity of appeals filed by the assessee without permission from the National Company Law Tribunal (NCLT).
4. Impact of Circular No. 17/2019 dated 08/08/2019 on appeals filed by the revenue with tax effect less than Rs. 50 lakhs.

Analysis:

Issue 1:
The Tribunal examined the provisions of Section 14 of the Insolvency and Bankruptcy Code, 2016, which prohibits the continuation of suits or proceedings against a corporate debtor during the moratorium period. Referring to relevant case laws, the Tribunal concluded that the appeals filed by the revenue against the corporate debtor are considered as suits and fall within the ambit of Section 14, thus cannot be allowed to proceed during the moratorium period.

Issue 2:
The Tribunal dismissed the appeals filed by the revenue against the company, emphasizing the overriding nature of the Insolvency and Bankruptcy Code over conflicting provisions of other enactments. The recent amendment to the IBC further solidified the binding nature of resolution plans or liquidation orders on all stakeholders, including government entities, thereby supporting the dismissal of the revenue's appeals.

Issue 3:
Regarding appeals filed by the assessee, the Tribunal highlighted the necessity of obtaining permission from the NCLT for such appeals to be valid during insolvency proceedings. As the assessee failed to provide the required authorization from the insolvency resolution professional, the Tribunal dismissed the appeals filed by the company, granting the liberty to refile after the moratorium period or resolution of insolvency.

Issue 4:
In light of Circular No. 17/2019 dated 08/08/2019, which raised the monetary limit for filing appeals by the revenue, the Tribunal found that the tax effect in the appeals under consideration was below the specified limit of Rs. 50 lakhs. Consequently, the Tribunal held that the appeals by the revenue were not maintainable as per the circular, and thus dismissed all six appeals.

In conclusion, the Tribunal dismissed the appeals filed by both the revenue and the assessee due to various reasons, including non-compliance with NCLT permissions, applicability of Section 14 of the IBC, and adherence to the monetary limits set by Circular No. 17/2019.

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