TaxTMI 
TaxTMI 
2021 (12) TMI 1408
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.... dated 22.06.2021 issued by the Respondent under Section 65(6) of the KGST Act and CGST Act (Annexure-L) for the period July 2017 to March 2018; (v) Quashing the intimation issued in Form GST DRC- 01A bearing Case ID No. ASSMT/OV 2021-22 dated 01.09.2021 issued by the Respondent under Section 74(5) of the KGST Act and the CGST Act (Annexure-N); (vi) Quashing the notice dated 22.10.2021, in GST Form ADT - 01, issued under Section 65 of the KGST Act and CGST Act, for the financial year 2018-2019 (Annexure-Q); (vii) Quashing the notice dated 22.10.2021, in GST Form ADT - 01, issued under Section 65 of the KGST Act and CGST Act, for the financial year 2019-2020 (Annexure-R); (viii) Quashing the Show Cause Notice dated 15.11.2021, issued by the Respondent under Section 74 read with Section 65 read with Section 50 and Section 122 of the KGST Act and CGST Act and Section 6 of the IGST Act, 2017 (Annexure-T); and (ix) Pass such other or further order as this Hon'ble Court may deem fit in the facts and circumstances of the case, in the interests of justice and equity. 2. Heard Sri T. Suryanarayana, learned Senior Counsel for the petitioner....
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....ed that in the event the instant proceedings initiated by the respondent against the petitioner are quashed, the proceedings to be initiated by the respondent later after lifting of the moratorium would be barred by limitation resulting in irretrievable loss and hardship to the respondent and on this ground also, the petition is liable to be dismissed. 5. By way of reply, the learned Senior Counsel for the petitioner submits that having regard to the specific words 'proceedings' employed in Section 14 of the IBC in relation to any court, tribunal, arbitration panel or other authority, the impugned proceedings initiated against the petitioner by the respondent - department are also to be suspended/stayed/kept in abeyance till completion of the Corporate Insolvency Resolution Process (CIRP) and lifting of the moratorium. It is also submitted that the apprehension of the respondent - State that proceedings to be initiated by the respondent after completion of the CIRP and lifting of the moratorium would be barred by limitation is unfounded in view of the non-obstante clause contained in Section 60(6) of the IBC which excludes the entire period during which the moratorium is....
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....under any other law for the time being in force, shall not be suspended or terminated on the grounds of insolvency, subject to the condition that there is no default in payment of current dues arising for the use or continuation of the license, permit, registration, quota, concession, clearances or a similar grant or right during the moratorium period;] (2) The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period. (2A) Where the interim resolution professional or resolution professional, as the case may be, considers the supply of goods or services critical to protect and preserve the value of the corporate debtor and manage the operations of such corporate debtor as a going concern, then the supply of such goods or services shall not be terminated, suspended or interrupted during the period of moratorium, except where such corporate debtor has not paid dues arising from such supply during the moratorium period or in such circumstances as may be specified. (3) The provisions of sub-section (1) shall not apply to- (a) such transactions, agreem....
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....of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority." That the Code will prevail over all other statutes inconsistent therewith has been explained in the recent decision dated 31st Aug., 2017 of the Supreme Court in Civil Appeal Nos. 3337-8338/2017 (M/s. Innoventive Industries Ltd. v. ICICI Bank). 2. In the instant case, the National Company Law Tribunal (NCLT) [which by virtue of Section 5 (1) of the Code is the Adjudicating Authority] has by its order dated 18th July 2017 admitted the petition under Section 7 of the Code filed by the SBI against the Respondent Assessee and prohibited, inter alia, "the institution of suits or continuation of pending suits or proceedings" against the Respondent This would include the present appeal by the I.T. Department ('Department') against the order of the Income Tax Appellate Tribunal in respect of the tax liability of the Respondent-Assessee. 3. Mr. Asheesh Jain, learned Senior Standing counsel for the Revenue, points out that unlike some of the earlier insolvency statutes the Code does no....
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....dmitted the petition under Section 7 of the IBC filed by the State Bank of India therein against the respondent-Assessee therein and prohibited inter-alia "the institution of suits or continuation of pending suits or proceedings" against the respondent therein and this would include the appeal filed before the Delhi High Court by the Income Tax Department against the order of the Income Tax Appellate Tribunal (ITAT) in respect of the tax liability of the respondent-assessee therein. Learned counsel for the petitioner-Companies also relied on a decision of the Supreme Court (Pr. Commissioner of Income Tax Vs. Monnet Ispat and Energy Limited), in which the said order of the Delhi High Court was confirmed by the Apex Court and in that case, the Supreme Court, while dealing with Section 238 of the IBC, held that IBC will over-ride anything inconsistent contained in any other enactment including the Income Tax Act, and it was further observed by the Apex Court, while referring to the case of Dena Bank Vs. Bhikhabhai Prabhudas Parekh and Co., reported in 2000 (5) SCC 694 that the Income Tax dues, being in the nature of Crown Debts, do not take precedence even over secured creditors, who ....
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....ed only as an intimation of the existing demand sent to the assessee holding PIN, and hence, it cannot be construed as coercive measures being taken against the petitioner-Companies. 9. Be that as it may. When there has been an order passed by the NCLT, Mumbai on 12.03.2018/19.03.2018, giving Moratorium, the case of the petitioners is governed by Sections 14 and 238 of the IBC, which read as follows: "Section 14: Moratorium:- (1) Subject to provisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely:- (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgement, decree or order in any Court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any ac....
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....appeal(s), if any that may be filed by any of the parties to these Writ Petitions. No costs. Consequently, W.M. Ps. are closed." 10. It is also relevant to state that in P. Mohan Raj's case supra, a three Judge Bench of the Apex Court has categorically held that the moratorium provision contained in Section 14 of the IBC would include proceedings under Section 138 of the Negotiable Instruments Act also and by token of the same reasoning, proceedings initiated by the respondent under the GST Act would also attract the embargo contained in Section 14 of the IBC. 11. The aforesaid undisputed facts and circumstances and the decisions of the Apex Court, Delhi High Court and Madras High Court, albeit under the Income Tax Act and the Negotiable Instruments Act are clearly applicable to the instant proceedings and under the GST Act also under these circumstances, as held by the Madras High Court, I am of the considered opinion) that in view of the specific embargo/bar contained in Section 14 of the IBC, the instant proceedings initiated by the respondent pursuant to the impugned notices deserve to be stayed/suspended/kept in abeyance till conclusion of the proceedings before the ....