Going concern liquidation sale reliefs may be granted, but tax exemptions remain for competent authorities to decide.

In a liquidation sale of a corporate debtor as a going concern, the Tribunal may grant consequential reliefs needed to make the acquisition workable, including directions on capital structure, creditor claims, operational liabilities, litigation consequences and other ancillary matters. It accepted that such non-tax reliefs could be issued to facilitate implementation of the sale. However, it declined a blanket taxation exemption and left tax-related prayers to the competent authorities, to be decided under the prevailing law, rules and regulations. The order therefore supports the going concern acquisition while preserving the jurisdiction of the tax authorities over fiscal liability.

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Issues: Whether the successful bidder in a liquidation sale of the corporate debtor as a going concern was entitled to the requested consequential exemptions, reliefs and directions, and whether the taxation-related prayers should be granted by the Tribunal.

Analysis: The application was moved in the context of a liquidation sale of the corporate debtor as a going concern under the liquidation framework. The liquidator expressed no objection to the reliefs sought, and the Tribunal accepted that certain consequential directions were necessary to make the acquisition workable. The Tribunal granted the reliefs relating to capital structure, creditor claims, operational liabilities, litigation consequences, and general ancillary directions. On taxation, however, the Tribunal did not grant a blanket exemption and held that the applicant could approach the competent authorities, which would decide the matter in accordance with the prevailing law, rules and regulations.

Conclusion: The application was only partly allowed. Consequential reliefs connected with the going concern acquisition were granted, while the taxation-related requests were left to the concerned authorities under the applicable law.

Final Conclusion: The order facilitates implementation of the going concern sale by allowing the non-tax reliefs sought, but it does not confer an across-the-board tax exemption and preserves the jurisdiction of the competent tax authorities.

Ratio Decidendi: In a liquidation sale of a corporate debtor as a going concern, the Tribunal may grant consequential reliefs necessary to give effect to the acquisition, but tax exemptions or overrides of fiscal liability must be determined by the competent authorities under the applicable law unless expressly provided otherwise.

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