IBC prevails over VAT attachment during liquidation; revenue-record rectification must be sought before the competent authority.

Under the Insolvency and Bankruptcy Code, a departmental attachment of the corporate debtor's assets under the Gujarat VAT regime, made during CIRP and continued into liquidation, could not be sustained against the liquidation estate because the Code has overriding effect and bars continuation of proceedings against the debtor. The Tribunal directed release of the attached assets in favour of the liquidator, while preserving the tax authority's right to lodge its claim before the liquidator. It also held that mutation or rectification of revenue records lay before the competent revenue authority, so that relief was not granted in these proceedings.

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Issues: (i) Whether the attachment of the corporate debtor's assets made under the Gujarat Value Added Tax Act during the CIRP and continuing into liquidation could be sustained in view of the Insolvency and Bankruptcy Code, 2016. (ii) Whether the request for cancellation or rectification of the mutation entry in the revenue record could be granted by the Tribunal.

Issue (i): Whether the attachment of the corporate debtor's assets made under the Gujarat Value Added Tax Act during the CIRP and continuing into liquidation could be sustained in view of the Insolvency and Bankruptcy Code, 2016.

Analysis: The attachment was made during the subsistence of the insolvency process and continued after the liquidation order. The liquidation regime under the Insolvency and Bankruptcy Code prevents institution or continuation of proceedings against the corporate debtor, and the Code has overriding effect where there is inconsistency with other laws. The Tribunal therefore treated the departmental attachment as incapable of being continued against the liquidation estate, while preserving the respondent's right to lodge its dues before the liquidator.

Conclusion: The attachment was directed to be released in favour of the liquidator, and the respondent was directed to pursue its claim before the liquidator.

Issue (ii): Whether the request for cancellation or rectification of the mutation entry in the revenue record could be granted by the Tribunal.

Analysis: The relief sought in relation to mutation and revenue records required action by the competent revenue authority. The Tribunal held that it lacked jurisdiction to order rectification of those records in the present proceeding and left the applicant to approach the proper authority.

Conclusion: The prayer for mutation-related relief was not granted by the Tribunal and the applicant was directed to approach the competent revenue authority.

Final Conclusion: The application succeeded only to the extent of release of the attached assets from departmental charge, while the revenue-record relief was left to the appropriate authority.

Ratio Decidendi: Where the Insolvency and Bankruptcy Code conflicts with another law during CIRP or liquidation, the Code prevails and a pre-existing attachment cannot be continued against the liquidation estate; relief affecting revenue records must be sought before the competent statutory authority.

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