TaxTMI 
TaxTMI 
2021 (9) TMI 157
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.... FACTS:- (i) M/s Bhushan Steel Limited is a public limited company registered under the Companies Act. It was also registered under U.P Tax on Entry of Goods into Local Areas Act, 2007, the U.P. VAT Act, 2008 and Central Sales Tax Act, 1956. (ii) It appears that M/s Bhushan Steel Ltd. incurred huge loan liabilities. Therefore, pursuant to the directions issued by the Reserve Bank of India, the Corporate Insolvency Resolution Process (for short "CIRP") with respect to Bhushan Steel Ltd., was initiated by the State Bank of India (S.B.I.) (a lender bank) which filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short "IBC") being Company Petition No.(IB)-201(PB)/2017 on 05.07.2017 before the National Company Law Tribunal (in short "NCLT"), i.e. Adjudicating Authority. (iii) The aforesaid petition of the S.B.I. was admitted by the Adjudicating Authority on 26.07.2017 and an Interim Resolution Professional (in short "IRP") was appointed under Section 13 of the IBC to be incharge of the affairs and management of the aforesaid Bhushan Steel Ltd. in accordance with Section 17 of the IBC. A public announcement was made by th....
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....odification as mentioned by the Adjudicating Authority in the aforesaid order dated 15.05.2018. The operative portion of the order of the Adjudicating Authority/ NCLT dated 15.05.2018 is reproduced below: "81. In view of the above we accept and approve the CoC approved resolution plan of HI Resolution Applicant-TSL. We also approve the appointment of monitoring agency from the date of the approval of the CoC approved resolution plan to function until the closing date i.e. the date on which the implementation of the steps set out in Annexure-5 of the CoC approved resolution plan would be completed. The monitoring agency shall have the same function, power and protection as conferred on the resolution professional under the Code and the CoC shall continue with its role and responsibility and have protection as set out in the Code including approving the matter as has been approved during the period prior to effective date. 82. In respect of the relief and concession as set forth in Annexure-8 it is not possible for us to issue any directions except to say that the monitoring agency alongwith the resolution applicant may make a claim before the authorities which shal....
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....sessment proceedings and the assessment orders were passed. The creation of demand and recovery of amount gave rise to the filing of the present set of writ petitions. (viii) From the averments made in the writ petition, the counter affidavit as well the discussion made in the order of the Adjudicating Authority/ NCLT dated 15.05.2018, it appears that one of the major point on facts is Annexure-8 to the resolution application. Copy of the aforesaid Anenxure-8 has been filed by the petitioners in Volume 1A, along with a supplementary affidavit in Writ Tax No.1085 of 2018 annexing therewith copy of application bearing Company Application No.244 of 2018 filed by the Resolution Professional before the Adjudicating Authority. Annexure-8 of the aforesaid application is reproduced below: Annexure 8:- "Extracts of Sections 10.1 and 10.2 of the COC Approved Resolution Plan (Resolution Plan of H1 Resolution Applicant as amended and supplemented by the First Addendum and the Second Addendum) Capitalised terms used but not defined in this Annexure shall have the meaning ascribed to them in the COC Approved Resolution Plan. 10.1 Reliefs and Concessions sou....
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.... any non-compliances of applicable Law by the Company. Further, the relevant Governmental Authorities will provide a reasonable period of time after the Closing Date, for the Resolution Applicant to assess the status of any non-compliances under the Applicable Law (including with respect to applicable environmental laws, directions or orders by the Ministry of Environment and Forest, permits, clearances and forest related clearances) and to procure that the Company regularizes such non-compliances under the Applicable Law existing prior to the Closing Date. 10.1.3 Under Section 115JB of the Income-tax Act, 1961, assessee company for which a rehabilitation scheme was approved or reference was made under the provisions of the erstwhile Sick Industrial Companies (Special Provisions), Act, 1985 was not subject to minimum alternate tax until the net worth becomes positive. Accordingly, a similar benefit ought to be extended to a resolution plan approved in accordance with the IBC since the IBC supersedes all other Applicable Law and deals with the same subject matter as the erstwhile Sick Industrial Companies (Special Provisions), Act, 1985. In light of this, The Central Board ....
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....ement by Listed Entities and Relaxation under sub-rule (7) of Rule 19 of the Securities Contracts (Regulation) Rules, 1957', in respect of the schemes of arrangement and also permit a scheme of arrangement involving the Company and the Resolution Applicant during the period that the Resolution Applicant holds in excess of 75% of the paid up equity share capital of the Company, 10.1.6 The Ministry of Corporate Affairs and / or the Adjudicating Authority shall exempt compliance with the provisions of Chapter XV of the Companies Act, 2013 (and the corresponding rules issued under the Companies Act, 2013). In respect of schemes of arrangement contemplated under the Plan. 10.1.7 The Department of Registration and Stamps of the relevant states (including Odisha, Maharashtra and Uttar Pradesh) and the Ministry of Corporate Affairs shall exempt the Resolution Applicant and the Company. From the levy of stamp duty and fees applicable in relation to this Plan and its implementation. 10.1.8 The Competition Commission of India: (i) shall permit the Resolution Applicant to make payment of the CIRP Costs and liquidation value due to Operational Creditors withi....
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.... arising out of non-compliance by the Company for obtaining prior consent for appointment of the Resolution Professional and in respect of the implementation of this Plan. An indicative list of agreements of the Company with such suppliers /customers is set out in Annexure 22. 10.1.13 The Adjudicating Authority shall direct that the Company shall not be liable for any non-compliance, default, breach, etc., during the period prior to the Closing Date, in relation to: (i) any contractual arrangements of the Company with counter-parties, including Governmental Authorities (such as IDCO, UPSIDC, SIPCOT, etc.); and (ii) failure to take or obtain any approvals, consents or permits relating to use of land for premises for industrial purposes. 10.1.14 The Adjudicating Authority shall direct that all proceedings, investigations, inquiries, etc. made, commenced or initiated by any person (including SEBI) against the Company in relation to the period prior to the Closing Date shall irrevocably and unconditionally stand abated, withdrawn, settled and/or extinguished, and the company shall have no Liability in this regard. 10.1.15 The Adjudicating Authority shall dire....
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....reeable terms on an arms length basis. 10.1.18 The Adjudicating Authority to permit supply from Tata Steel's captive mines to the Company to improve business viability and operations of the Company. 10.1.19 The Directorate of Industries shall waive the requirement of obtaining an approval for change in ownership/ constitution / management of the Company and shall continue to grant state and other incentives. 10.1.20 The relevant Governmental Authority in relation to Tax shall waive any Tax or interest and shall not initiate any penal proceedings in case of non-fulfilment of any obligations of the Company in relation to which benefit has been claimed by the Company prior to the effective Date, including in relation to non-fulfilment of export obligation in respect of customs incentive including but not limited to imports under Export Promotion Capital Goods licenses, non-submission of forms for concessional duty rates, non fulfilment of conditions relating to grant of state incentives etc. 10.1.21 The Adjudicating Authority shall direct that: (A) pending the occurrence of the Closing Date, no Financial Creditor shall be entitled to take, initiate ....
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....owed to the relevant security provider and due as of the insolvency Commencement Date, and shall immediately, irrevocably and unconditionally stand extinguished, waived, withdrawn and abated on and from the Closing Date. The Existing Promoter Group and any other security provider shall have deemed to have waived the right of subrogation against the Company and the Company shall not be liable in respect of any such claims, demands or proceedings. 10.1.24 The Company shall incur no Liabilities, directly or indirectly (including but not limited to debt servicing Liabilities), other than to the extent specified in this Plan, for the period from the Insolvency Commencement Date until the Closing Date, further, the Company shall not incur any Liabilities post the Closing Date which relate to a period prior to the Closing Date, other than pursuant to or as per the Plan. 10.1.25 The Reserve Bank of India shall permit repayment or settlement of the ECBs as well as ECA lenders, as the case may be, by the Company, including novation of any ECB/ECA facility from the Financial Creditors in favour of the Resolution Applicant as per the terms of this Plan. 10.1.26 SEBI ....
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....vour of resolution applicants for corporate insolvency resolution processes of other corporate (debtors as maybe beneficial to the Resolution Applicant and/or the Company for successful corporate insolvency resolution of the Company and which shall not adversely impact the financial proposal under this Plan for the Financial Creditors. 10.1.29 The Adjudicating Authority shall approve the terms set out in Section 8.7.3(i) and Section 8.7.5 of this plan respectively. 10.1.30 The Adjudicating Authority shall approve the continuation of the Resolution professional along with certain representatives of Deloitte Touche Tohmatsu India LLP as the Monitoring Agency for the period from the Effective Date until the Closing Date in accordance with the terms of this Plan. The Monitoring Agency shall have the same functions, powers and protections as ascribed to the Resolution Professional under the Code. The CoC shall continue with its roles and responsibilities, and have protections, as set out in the IBC including approving the matters as are being approved during the period prior to the effective Date. 10.1.31 The obligation of the Guarantors shall not be extinguis....
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.... duties (x) The claims of statutory creditors have been provided in Part-C of Annexure-8 of the resolution plan contains the details of the total Outstanding Operational Debt (excluding claims of the workmen and employees) as stated in Part-A, "the verified and admitted amounts payable to the statutory creditors are set out in the table below". (xi) Annexure-9 to the aforesaid resolution plan contains the claims of operational creditors that are under verification which does not include tax dues. (xii) Annexure-10 to the aforesaid resolution plan contains particulars of claims of operational creditors that are subjudice which includes various writ petition filed before the Orrisa High Court and Delhi High Court as well several cases pending before different subordinate courts or authorities but it does not include any of the writ petitions filed before this court or SLP filed before the Hon'ble Supreme Court. At the end of the Annexure-10, a note has been added that "in addition to the list above, the subjudice claims listed in Annexure-12 are also deemed to be incorporated herein". (xiii) Annexure-11 contains claims of operation creditor that ar....
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....le 226 of the Constitution of India and in proceeding under Article 136 and Article 141 of the Constitution of India? (iv) Whether the interim order granted by the Hon'ble Supreme Court, which is in the nature of an undertaking will be taken to be covered in the Resolution Plan in view of the operation of Article 144 of the Constitution of India? (v) Whether the petitioner obtained the order from the adjudicating authority in contravention of Section 30 and Section 31 of the IBC Code, 2016 read with CIRP Regulations without disclosing in the Resolution Plan, the liability towards Entry tax when it was simultaneously contesting the proceedings before the Hon'ble High Court in its writ jurisdiction and also did not move any application before the Hon'ble High Court intimating the Hon'ble High Court about appointment of the interim Resolution Professional? (vi) Whether on account of active concealment of facts the petitioner has disentitled itself in equity for any relief from this Hon'ble Court and to maintain judicial discipline, conflicting orders by coordinate benches cannot be passed? (vii) Whether the amount of tax collecte....