TaxTMI 
TaxTMI 
2019 (10) TMI 1346
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....nk Account's (i) Andhra Bank Account No. 100611100002661, Specialised Corporate Finance Branch, Hyderabad, IFSC-ANDB0001006 and/or (ii) Bank of Baroda Account No. 25210200000136, CFS Branch, Hyderabad, IFSC-BARBOINDHYD, in order to allow the IRP to take control and custody of the Applicant's Assets, in consonance with the provisions of the IBC. 2. The brief averments made in the Application filed by the Interim Resolution Professional are as follows: a) The Applicant herein is running several hotels and various other facilities, including a hotel located at Bommaraspet Village, Shamirpet, Hyderabad ("Resorts"). Applicant entered into a Management Agreement with Aloe Hotels and Resorts Pvt. Ltd.("Respondent No. 3"/"Operator"), who is engaged as a service provider in the hospitality business. b) A Hotel Management Agreement ("Management Agreement") dated 20.01.2013 entered between the Applicant and Operator. The said Management Agreement is periodically renewed with the expiration of its term, and the latest renewal took place on 20.07.2018. c) The Commercial Tax and Income Tax Authorities, through various demand notices, have alleged that the Applicant has failed to p....
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....nt were attached and hence the Applicant could not use the Assets in its own bank accounts for running its business. e) The monies of the Applicant are partly in the bank accounts of the Applicant, and a major portion is in the accounts of Respondent No. 3 i.e. Aloe Hotels and Resorts Private Limited (Collectively, the "Applicant's Assets"). This is due to the commercial relationship between the Operator and Applicant vide the Management Agreement, and the subsequent developments thereafter which necessitated operational payments owed by the Applicant to be paid by the Operator, to enable the continuation of the Applicant as a going concern per the Management Agreement f) It is averred that the Respondent No. 2 has alleged that the Applicant was operating through the account of Operator, and thereby ordered the relevant bank authorities to attach the accounts of the Operator in the months of January and March 2019. g) It is averred that according to Part XIV of the Management Agreement, all tax liabilities relating to the operations of the concerned resorts were required to be paid by the Applicant. However, the Operator was liable to pay the GST amount relating to the ma....
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....N ROAD BRANCH A/C NO. 1003568090 d) The said accounts were provisionally attached by Addl.DirecorGenral, Director General of GST intelligence, Hyderabad Zonal Unit, Begumpet, Hyderabad. It is, interalia, stated by the said authorities that the amount lying with the said M/s. Aloe Hotels and Resort Pvt Ltd belongs to the Respondent No. 2 and thereby they have attached the accounts. e) It is averred that amount which was already in the bank accounts could not be utilized by the company due to the attachment of the GST authorities can now be utilized for clearing the operational dues/arrears including our salaries. 4. The averments made in the Counters are as follows: a) It is averred that the Corporate Debtor collected GST from the clients and diverted the same for their own use and not depositing the same with the Government. b) It is averred that from July, 2017 to August, 2018 the Corporate Debtor collected GST and not paid the GST of RS. 11.95 Crores. Even after initiation of investigation during the period from September, 2018 to December, 2018 the Corporate Debtor continues to evade payment of GST collected. c) It is averred that the bank accounts of 3rd Respondent a....
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....llow the IRP to take control and custody of the Applicants assets in consonance with the provisions of the IBC" may be allowed by this Tribunal. 6. In support of his above plea, the learned counsel submitted that (a) Non-access to the operators account post the moratorium is preventing the CIRP from being conducted as per the IBC (b) IRP is empowered under IBC to access applicant's assets with third parties (c) unfreezing and use of operators Bank Account as per IBC provisions is in furtherance of the IBC objectives (d) IBC provisions have precedence and should be enforced via unfreezing the operation Bank Account. 7. It is the case of applicant that the applicant is hard pressed to meet the operational costs of the applicant during the CIRP process and thus continued existence of the Applicant itself is in danger, which is in violation of the going concern objective of the IBC. Counsel further submits that freezing of Bank Accounts has defeated the objective of value maximization under the IBC. The counsel further states that in terms of Section 18(f) (ii) of the Code, IRP is empowered to take control and custody of any asset including assets that may or may not be in posses....
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....ubmits that the GST Electronic filing system has not allowed the applicant to make such payments until pre-CIRP filings have been done. He further submitted that IRP is liable to pay regularly only the post-CIRP GST dues and all dues of the pre-CIRP period have to be claimed by GST authorities by filing their claim in Form-B as is applicable to all the other operational creditors. 11. He further submits that any payment of alleged pre-CIRP dues by the Applicant to a single operational creditor i.e R-2 during on going CIRP in exclusion of all other operational creditors as well as financial creditors as demanded by R-2 shall be in violation of Article 14 of the Constitution of India, the IBC code and the Judgement of the Hon'ble Supreme court in the matter of Principal Commissioner of Income Tax vs. Monnet Ispat & Energy Ltd. It is further stated by Counsel that the operational debt of R.2 (Post-CIRP) shall be resolved along with the other operational creditors. 12. It is the case of applicant that R.2 has already submitted its claim as operational creditor on Form-B with the IRP and R.2 cannot demand upfront payment of the alleged tax claim without the conclusion of the CIRP.....