TaxTMI 
TaxTMI 
2023 (2) TMI 682
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....e., Sree Metaliks Limited ["SML"] asserts, that the impugned show-cause notice is liable to be quashed and/or set aside, for the reason, that it has been issued after the Resolution Plan framed under the aegis of the National Company Law Tribunal, Kolkata Bench [in short "NCLT"] on 07.11.2017, received the imprimatur of the National Company Law Appellate Tribunal [in short "NCLAT"]. 3. In support of this plea, SML adverts to two significant documents. 3.1 Firstly, the Public Announcement made by one Mr Vinod Kumar Kothari i.e., the Interim Resolution Professional (IRP) on 01.02.2017, calling upon all creditors of SML to submit proof of their claims on or before 13.02.2017 in such Forms as prescribed under the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ["2016 Regulations"] with him i.e., the IRP. 3.2 Secondly, the e-mail dated 17.05.2017 addressed by the Resolution Professional (RP) i.e., one Mr Kuldeeep Verma to Senior Intelligence Officer, Directorate of Revenue Intelligence, Bhubaneshwar Regional Unit/respondent no.3. Via this e-mail, the RP informed respondent no.3, that Corporate Insolvency Resolutio....
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.... 10. It is alleged, that SML had imported capital goods under the EPCG Scheme, bearing an assessable value of Rs 43,21,20,733/-, and that in respect of such goods, it saved duty amounting to Rs. 8,51,13, 531/-. It is averred, that in this context, SML took benefit of the exemption notifications dated 17.09.2004, 09.05.2008 and 11.09.2009. 11. It is also averred by respondent nos. 2,3 and 7, that since SML had not fulfilled obligations under the 16 licences/authorizations issued in its favour, it has violated the conditions of EPCG authorisations, as enunciated in Chapter 5 of the Foreign Trade Policy, 2004-2009 and 2009-2014 as also the conditions of EPCG Bonds and relevant applicable Customs Notifications. 12. Pertinently, the impugned show-cause notice was issued at a point in time when SML's networth stood eroded, which had propelled SML to file a reference before the Board for Industrial and Financial Reconstruction (BIFR) and register itself under section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 [in short "SICA"]. 12.1 The BIFR registered the petitioner's reference on 18.11.2014. However, before a final decision could be taken with rega....
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....viting claims from SML's creditors. The Public Announcement stipulated, that creditors were required to file their proof of claims with the IRP on or before 13.02.2017. 20. On 09.03.2017, the Committee of Creditors (COC) met and appointed one Mr Kuldeep Verma as the RP. The management of SML from that date, thus, vested with the RP. 21. Consequently, on 17.05.2017, the RP, as alluded to hereinabove, wrote to respondent no.3 inter alia calling upon it to furnish details concerning SML in the backdrop of the summons which had been issued to SML under Section 108 of the 1962 Act. 22. The record shows, that Mr Agarwal, the erstwhile managing director of SML was also the resolution applicant. Evidently, he submitted a Resolution Plan on 17.08.2017, which was amended and finally approved by the COC, with 78.53% voting share favouring approval of the Resolution Plan. 23. Since SREI preferred an appeal to NCLAT, the operation of the Resolution Plan, as approved by the NCLT, was stayed on 28.11.2017. However, finally, the NCLAT approved the Plan with certain modifications via an order dated 13.12.2018. 24. We are informed, that since then, the revised/modified Resolution Plan....
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....hat on 10.03.2021 the instant writ petition was moved before a coordinate bench. The coordinate bench, on 10.01.2022 issued interim directions, whereby it stayed the operation of the deficiency letters dated 01.11.2021 and 22.11.2021 issued by respondent no. 4, and also restrained respondent no.1 from taking any coercive action against SML. The record also shows that SML had also moved an application i.e., CM APPL. 44248/2021 during the pendency of the writ petition for issuance of the following directions: "(a) Direct the Respondents and more specifically Respondent No.4 to take no coercive action during the pendency of the present Writ Petition. (b) Pass an order directing [the] Respondent No. 4 to remove the Petitioner's/Applicant's name from the DEL, enabling the Petitioner/Applicant to obtain [a]fresh EPCG License and avail its lawful entitlement to the EPCG Scheme issued by the Government of India. (c) Set aside the deficiency letter dated 01.11.2021 and 22.11.2021 issued by Respondent No.4 to obtain the fresh EPCG License." 31.1 This application was not entertained, since according to the Court, the main relief sought in the writ petitio....
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....um, since the impugned show-cause notice was issued by respondent no.2, who is located in Hyderabad, the petitioner is based in Orissa, and none of the goods had been imported into the country via Delhi. Therefore, merely because the adjudicating authority was in Delhi "does not confer jurisdiction" on this Court. In support of this plea, reliance was placed on the judgement dated 01.08.2011 rendered in the case of Sterling Agro Industries Ltd. vs Union of India & Ors. 2011 SCC OnLine Del 3162. (ii) Section 142A of the 1962 Act recognises the fact, that the liability of the assessee under the Act is a first charge on its property. The Supreme Court, in the judgement dated 06.09.2022 rendered in the case of State Tax Officer (1) vs Rainbow Papers Ltd. 2022 SCC Online SC 1162, in the context of a pari materia provision i.e., Section 48 of the Gujarat Value Added Tax, 2003 [in short "GVAT Act"] has held, that such authorities were "secured creditors" under Section 3(30) of the Code, and accordingly, their claims had a higher priority under the waterfall mechanism, contemplated in Section 53 of the said Code. Since the Resolution Plan approved by NCLAT did not treat the Custom....
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....ing upon all creditors [which included operational creditors, such as the respondents before us] to submit their proof of claims. (vi) As noticed above, a specific e-mail dated 17.05.2017 was served on respondent no. 3 by the RP, whereby not only was the said respondent informed that CIRP was on, but also that since SML had been issued summons under Section 108 of the 1962 Act, details concerning SML should be furnished to the RP. (vii) Admittedly, the DRI/DGFT did not submit their proof of claims. Furthermore, respondent no.3 neither replied nor furnished any information, as required by the RP via the e-mail dated 17.05.2017. 38. Given this position, one would have to examine, which side of the Rubicon [i.e., the law enunciated by the Supreme Court] SML's case falls on. 39. The Supreme Court in the case of Ghanashyam Mishra & Sons Pvt. Ltd. vs. Edelweiss Asset Reconstruction Company Ltd. (2021) 9 SCC 657 was inter alia called upon to rule on the following: (i) Whether the claims reflected in the Resolution Plan as approved under Section 31 of the Code would stand frozen, and thus bind all stakeholders? (ii) Whether statutory dues....
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....hat although Section 142A of the 1962 Act commences with a non-obstante clause, it also adverts to certain enactments [such as the Code] which may provide otherwise. A plain reading of Section 142A of the 1962 Act, makes that crystal clear. "142A. Liability under Act to be first charge.-Notwithstanding anything to the contrary contained in any Central Act or State Act, any amount of duty, penalty, interest or any other sum payable by an assessee or any other person under this Act, shall, save as otherwise provided in section 529A of the Companies Act, 1956, the Recovery of Debts Due to Banks and the Financial Institutions Act, 1993, [the Securitisation and Reconstruction of Financial Assets and the Enforcement of Security Interest Act, 2002 and the Insolvency and Bankruptcy Code, 2016], be the first charge on the property of the assessee or the person, as the case may be.]" 45. Mr Sharma, in effect, has sought to draw a parity between Section 48 of the GVAT Act, which came up for consideration in the context of Section 53 of the Code, and Section 142A of the 1962 Act. Pertinently, Section 48 of the GVAT Act does not save provisions of other statutes, in particular the C....
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....tory appeal was also filed, under Section 62 of the Code, with the Supreme Court. Importantly, the NCLAT had confirmed the order of NCLT, as the appellant/statutory authority, according to the NCLAT, had approached not only the RP but also the NCLT, at a belated stage. 48. It is in this context, that the Supreme Court ruled as follows: (i) First, because of the statutory charge created under Section 48 of the GVAT Act, the appellant/statutory authority was a secured creditor within the meaning of Section 3(30) of the Code. Furthermore, the Supreme Court also ruled, that the timeline for submission of claims under the 2016 Regulations was not mandatory, but only directory. (ii) Second, prior to the amendment carried out via notification dated 03.07.2018 [with effect from 04.07.2018] the creditor was required to submit "proof of claim" before the expiration of the last date mentioned in the public announcement. [See Regulation 12(1) read with sub-Regulation (2)]. However, with effect from 04.07.2018, the creditor is required to submit a "claim with proof" on or before the last date mentioned in the public announcement. (iii) Third, in case the Resolution....
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....in the prescribed form, albeit after the last date of submission indicated in the public announcement by the IRP, but before the NCLT had rendered its decision in the matter. 50.3 Besides this, Section 48 of the GVAT Act is not pari materia with Section 142A of the 1962 Act. Section 142A of the 1962 Act plainly states that any amount payable by way of duty, penalty, interest or any other sum payable by an assessee or any other person under the Act shall have the first charge on the property of the assessee or the person, as the case may be, save as otherwise provided inter alia under the Code. Section 48 of the GVAT Act does not contain any such exception and/or carve out. 51. This is a case, where despite knowledge, the statutory authorities chose not to submit their proof of claim. Mr Sharma's argument, that since it was known to SML that amounts were due, proof of claim [under the unamended Regulation i.e., Regulation 12] was not required to be filed, is difficult to accept, because if this argument were to be sustained, then whatever the assessee [in this case SML] were to state before the RP would have to be taken as the gospel truth. In a given case, the assessee could ....