Tribunal permits access to GST Portal Account during Corporate Insolvency Resolution Process

The Tribunal allowed the Corporate Debtor access to its GST Portal Account during the Corporate Insolvency Resolution Process (CIRP) to file GST Returns and pay the net GST liability without clearing past dues. Tax authorities could claim pre-admission period dues under the Insolvency and Bankruptcy Code, with the Resolution Professional not obligated to pay pre-admission dues before accepting tax liabilities arising during CIRP. The judgment emphasized the IBC's supremacy over other laws, directing all Respondents to permit the Corporate Debtor to manage its GST obligations from the initiation of CIRP.

---

---

Issues: Permission to access GST Portal Account during CIRP, Payment of net GST liability, Treatment of pre-admission GST dues

Permission to access GST Portal Account during CIRP:
The judgment addresses the issue of whether the Corporate Debtor should be allowed access to its GST Portal Account to file GST Returns during the period of Corporate Insolvency Resolution Process (CIRP). The Resolution Professional sought permission for the Corporate Debtor to access the account and pay the net GST liability from the date of commencement of CIRP. The 1st Respondent argued that current dues cannot be accepted before clearing past dues as per the GST Act. The Tribunal observed that if the Corporate Debtor is to be run as a going concern during CIRP, it can be obligated to pay taxes from the initiation of CIRP. The creditors, including Tax authorities, can claim against the Corporate Debtor for pre-admission period dues under the Insolvency and Bankruptcy Code.

Payment of net GST liability:
The Tribunal highlighted that if the Corporate Debtor's GST Portal is blocked, it would face challenges in generating bills falling under GST and paying taxes for the post-admission period. The judgment emphasized that Tax authorities fall under the Operational Creditor category, and they can make claims before the Resolution Professional instead of demanding payment of pre-admission dues before accepting tax liabilities arising during CIRP. The Tribunal referenced Section 238 of the Insolvency and Bankruptcy Code, stating that the IBC supersedes other laws in case of contradictions. It directed all Respondents to allow the Corporate Debtor access to its GST Net Portal Account, file GST Returns without insisting on past GST dues payment, and adjust net GST liability from the commencement of CIRP.

Treatment of pre-admission GST dues:
Regarding the treatment of pre-admission GST dues, the judgment clarified that Tax authorities can claim against the Corporate Debtor for pre-admission period dues under the Insolvency and Bankruptcy Code. The Tribunal emphasized that the Resolution Professional should not be compelled to pay pre-admission dues before accepting tax liabilities arising during CIRP. It highlighted that the IBC's overriding effect on other laws ensures that business operations during CIRP are not disrupted due to lack of specific provisions in the GST Act. The judgment ultimately disposed of the application, allowing the Corporate Debtor to file GST Returns and pay net GST liability from the commencement of CIRP without clearing past dues.

---