IBC resolution plan effect on GST proceedings stayed pending further hearing

Proceedings under section 74 of the Uttar Pradesh GST Act, 2017 were challenged on the basis that the corporate debtors' resolution plans had already been approved under the Insolvency and Bankruptcy Code, 2016. The High Court noted a prima facie view that the impugned show cause notices and orders were covered by the principles in the cited Supreme Court and coordinate Bench decisions on the effect of approved resolution plans, and granted interim protection. The orders were stayed till further orders to the extent they related to the demand against the petitioners, with further pleadings directed.

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Issues: Whether the impugned proceedings and orders under section 74 of the Uttar Pradesh GST Act, 2017 could proceed against the petitioners in view of the approved resolution plans under the Insolvency and Bankruptcy Code, 2016.

Analysis: The petitioners had challenged the show cause notices and the subsequent orders passed under section 74 of the Uttar Pradesh GST Act, 2017 in relation to companies whose resolution plans had already been accepted by the National Company Law Tribunal. The Court recorded a prima facie view that the proceedings were covered by the principles stated in the cited Supreme Court and coordinate Bench decisions, and granted interim protection pending further hearing.

Outcome: The impugned orders under section 74 of the Uttar Pradesh GST Act, 2017 were stayed till further orders insofar as they related to the demand against the petitioners, and counter affidavit and rejoinder timelines were fixed.

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