Statutory charge under VAT law secures only attached dues; incorrect claim disclosure does not by itself waive that security.

A statutory charge under the Gujarat Value Added Tax Act secured only the VAT component of the claimant's composite dues and not the CST component, so secured-creditor status could not extend to the entire claim. An incorrect disclosure of "N.A." in Form B did not amount to waiver, because a statutory charge is not lost without intentional abandonment with knowledge. The resolution professional was required to verify claims from available records, but the mistaken disclosure did not extinguish the charge. The resolution plan was left intact, while the claimant was recognised as a secured operational creditor only to the extent of VAT dues.

---

---

Issues: (i) Whether the statutory charge under the Gujarat Value Added Tax Act entitled the appellant to be treated as a secured creditor only in respect of the VAT component of its composite tax claim, and not the CST component; (ii) Whether the appellant's disclosure of "N.A." in Form B and the resolution professional's reliance on that disclosure precluded recognition of the statutory charge.

Issue (i): Whether the statutory charge under the Gujarat Value Added Tax Act entitled the appellant to be treated as a secured creditor only in respect of the VAT component of its composite tax claim, and not the CST component.

Analysis: The statutory charge created by Section 48 of the Gujarat Value Added Tax Act operated only in relation to the VAT dues. The claim filed by the appellant was composite and included VAT, CST and interest, and the statutory protection could not be extended to the CST component. The resolution framework under the Insolvency and Bankruptcy Code therefore did not justify treating the entire claim as secured.

Conclusion: The appellant was entitled to secured status only for the VAT component and not for the full composite claim.

Issue (ii): Whether the appellant's disclosure of "N.A." in Form B and the resolution professional's reliance on that disclosure precluded recognition of the statutory charge.

Analysis: A statutory charge is not waived merely because the claimant failed to assert security in the claim form. Waiver requires intentional abandonment with knowledge, and the existence of a statutory charge cannot be defeated by conduct alone. At the same time, the resolution professional is expected to collate and verify claims from available records and cannot ignore material information such as a lien already known in the proceedings. The appellant's incorrect disclosure did not extinguish the statutory charge, though the limited secured status remained confined to the VAT component.

Conclusion: The appellant's Form B disclosure did not amount to waiver of the statutory charge.

Final Conclusion: The resolution plan was not to be set aside, but the appellant had to be recognised as a secured operational creditor only to the extent of the VAT dues under the State tax statute, with the balance claim continuing to be dealt with under the approved plan.

Ratio Decidendi: A statutory charge under a State VAT law secures only the dues to which the charge attaches, and an incorrect claim-form disclosure does not by itself waive that statutory charge; the resolution professional must verify and collate claims from available records.

---