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of <h1>Tax assessment orders during insolvency proceedings valid despite Section 14 IBC moratorium claims</h1> Kerala HC dismissed a petition challenging tax assessment orders during CIRP proceedings. The petitioner argued the assessment was invalid as the Official ... CIRP Proceedings - Outstand Tax Dues claimed before the liquidator - Petitioner challenged the Validity of assessment order - Official Liquidator was not heard while finalising the assessment - bar under Section 14 of the IBC - HELD THAT:- From perusal of Section 14 of the IBC and several Judgments of the other High Courts as well as the Supreme Court, it is well settled that Section 14 of the IBC does not create a bar for finalisation of the assessment and adjudication proceedings in respect of the taxes. On the resolution once the reference has been admitted, there is moratorium for recovery of the tax dues but, there is no bar for finalisation of the assessment and adjudication proceedings. On perusal of the impugned orders Exhibits P-7 to P- 10, it is evident that the petitioner was issued notice to which reply was filed and after hearing, these orders in Exhibits P-7 to P-10 has been finalised. There are no substance in the submissions of the Learned Counsel for the petitioner that: since the Official Liquidator was not heard, the order has become bad. It is the petitioner who was issued notice - petition dismissed. Issues Involved:1. Challenge to orders under Insolvency and Bankruptcy Code.2. Opportunity for the petitioner to present case during moratorium period.Issue 1: Challenge to orders under Insolvency and Bankruptcy CodeThe petitioner, a dealer of BMW cars in Kerala, challenged orders Exhibits P-7 to P-10 under the Insolvency and Bankruptcy Code, 2016 (IBC). The Federal Bank of India initiated corporate insolvency resolution process against the petitioner, leading to appointment of an Interim Resolution Professional (IRP). Subsequently, the Committee of Creditors rejected resolution plans, opting for liquidation. The National Company Law Tribunal appointed the IRP as the Liquidator, commencing a moratorium. The Liquidator received claims from the 1st respondent during this period.Issue 2: Opportunity for the petitioner during moratorium periodThe petitioner's counsel argued that orders in Exhibits P-7 to P-10 were issued after the moratorium began, depriving the petitioner of a chance to contest the matter. In response, the respondent's counsel contended that the petitioner was indeed given notice, filed a reply, and was heard through an authorized representative. They argued that finalization of assessment proceedings during the moratorium is permissible under the IBC.The court examined Section 14 of the IBC, which imposes a moratorium on certain actions upon insolvency commencement. It noted that the moratorium does not bar finalization of assessment and adjudication proceedings. The court found that the petitioner was issued notice, had a representative present during the hearing, and filed a reply to the show cause notice. Consequently, the court dismissed the petition, stating that the Official Liquidator should consider the petitioner's claims in accordance with the law.
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