Overriding effect of the insolvency code bars tribunal adjudication; tax claims must be processed by the Official Liquidator.

Insolvency proceedings and an NCLT-imposed moratorium render pending tribunal appeals infructuous, preventing adjudication while the moratorium subsists; parties may seek reinstitution later. The Insolvency and Bankruptcy Code's overriding effect requires that claims arising under other laws, including income-tax claims, be presented to and processed by the Official Liquidator under the insolvency distribution regime (including admission and distribution mechanisms such as Section 53(1)), so tax claims are to be dealt with in the liquidation/insolvency process rather than before the tribunal during moratorium.

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Issues: (i) Whether the pending appeals before the Tribunal have become infructuous on account of initiation of insolvency proceedings and an intervening moratorium under the Insolvency and Bankruptcy Code, 2016; (ii) Whether claims including tax claims are required to be entertained by the Official Liquidator under Section 53(1) of the Insolvency and Bankruptcy Code, 2016 in view of the overriding effect of Section 238 of the Code.

Issue (i): Whether the appeals are infructuous due to insolvency proceedings and moratorium.

Analysis: The Tribunal noted the initiation of insolvency proceedings against the assessee and the NCLT order imposing a moratorium. The Tribunal relied on the principle that the Insolvency and Bankruptcy Code, 2016 has overriding effect as recognised by the Supreme Court, and considered the practical effect of the moratorium on proceedings before other fora. The factual matrix, including the NCLT moratorium order, was not disputed by the Revenue.

Conclusion: The appeals have become infructuous on account of initiation of insolvency proceedings and the moratorium.

Issue (ii): Whether tax claims must be entertained by the Official Liquidator under Section 53(1) of the Insolvency and Bankruptcy Code, 2016 in view of Section 238.

Analysis: The Tribunal applied Section 238 of the Insolvency and Bankruptcy Code, 2016, which confers an overriding effect to the Code over inconsistent provisions of other statutes. The Tribunal held that in the insolvency context, claims including those of the Income Tax Department fall to be addressed under the Code and, specifically, through mechanisms such as Section 53(1) for distribution to creditors or admission by the Official Liquidator.

Conclusion: Tax claims including claims under the Income-tax Act, 1961 shall be entertained and processed by the Official Liquidator under Section 53(1) of the Insolvency and Bankruptcy Code, 2016 in view of the overriding effect of Section 238 of the Code.

Final Conclusion: The Tribunal dismissed both appeals as infructuous for statistical purposes while permitting the parties liberty to apply for reinstitution of their respective appeals, reflecting that the insolvency moratorium and the Code's supremacy preclude the Tribunal from adjudicating the tax claims at present.

Ratio Decidendi: Section 238 of the Insolvency and Bankruptcy Code, 2016 gives the Code an overriding effect over other statutes, and therefore claims arising under other laws, including tax claims, are to be dealt with under the insolvency resolution/liquidation process (including Section 53(1) of the Insolvency and Bankruptcy Code, 2016) while a moratorium is in force.

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