IBC resolution plan overrides pre-CIRP tax dues, barring enforcement of excluded income tax demands after approval.

The HC held that non-consideration of the insolvency framework and the binding effect of an approved resolution plan could amount to an error apparent on the face of the record, making review maintainable. It further held that a pre-CIRP income tax demand and assessment order, if not included in the approved resolution plan, could not be enforced against the corporate debtor after approval, because the IBC moratorium, binding plan, and overriding effect of the Code gave the successful resolution applicant a clean slate. The existence of an appellate remedy under the Income Tax Act did not bar writ jurisdiction where the challenge was to the very enforceability of the demand.

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Issues: (i) whether the review petition disclosed an error apparent on the face of the record in the earlier dismissal of the writ petition for non-consideration of the Insolvency and Bankruptcy Code, 2016; (ii) whether a pre-CIRP income tax demand and assessment order not forming part of the approved resolution plan could be enforced against the corporate debtor after approval of the plan; (iii) whether availability of an appellate remedy under the Income Tax Act barred invocation of writ jurisdiction in the facts of the case.

Issue (i): whether the review petition disclosed an error apparent on the face of the record in the earlier dismissal of the writ petition for non-consideration of the Insolvency and Bankruptcy Code, 2016.

Analysis: Review jurisdiction is narrow, but non-consideration of a binding statutory regime and the controlling effect of later insolvency legislation on recovery of dues can amount to an error apparent. The earlier dismissal proceeded without adequately addressing the effect of the corporate insolvency resolution process, the moratorium, and the binding nature of the approved resolution plan.

Conclusion: The review petition disclosed a sufficient error apparent and was maintainable.

Issue (ii): whether a pre-CIRP income tax demand and assessment order not forming part of the approved resolution plan could be enforced against the corporate debtor after approval of the plan.

Analysis: Once the corporate insolvency resolution process commenced, claims had to be lodged within that framework and were subject to the moratorium. On approval of the resolution plan, the statutory scheme made the plan binding on all stakeholders, and the non-obstante clause gave the insolvency code overriding effect over inconsistent recovery provisions in other laws. Applying the clean slate principle, claims not included in the plan could not later be revived against the successful resolution applicant or the corporate debtor.

Conclusion: The pre-CIRP tax demand and assessment order were not enforceable and stood extinguished to the extent they were outside the approved resolution plan.

Issue (iii): whether availability of an appellate remedy under the Income Tax Act barred invocation of writ jurisdiction in the facts of the case.

Analysis: The challenge was not to the merits of a routine assessment but to the very authority to enforce the demand in light of insolvency proceedings and the approved resolution plan. That raised a jurisdictional issue and a pure question of law, for which the existence of an ordinary statutory appeal did not operate as an absolute bar.

Conclusion: The writ petition was maintainable despite the alternate remedy.

Final Conclusion: The earlier dismissal was set aside, and the impugned tax proceedings were quashed because the insolvency resolution framework and the approved plan superseded and extinguished the pre-CIRP liability.

Ratio Decidendi: Once a resolution plan is approved under the Insolvency and Bankruptcy Code, 2016, all claims not forming part of the plan, including statutory tax dues for the pre-CIRP period, stand extinguished and cannot be enforced against the corporate debtor in view of the binding effect of the plan and the overriding operation of the Code.

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