TaxTMI 
TaxTMI 
TaxTMI 
2024 (5) TMI 42
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....dent Nos. 1 to 3 and Mr. K. Arvind Kumar, Central Government Counsel appearing for respondent No. 4. 3. The challenge in all the three writ petitions is to the order issued by respondent No. 1 under Section 73 of the SGST/CGST Act 2017. The challenge is primarily on the ground that the notices have now been issued, petitioner No. 1 Company which has gone into liquidation and petitioner No. 2 is the Company which has acquired the liquidated Company, the main contention of the learned counsel for the petitioners was that petitioner No. 1 was the corporate debtor in the liquidation proceedings and as such was a going concern and petitioner No. 2 was the auction purchaser and acquired the said petitioner No. 1 Company on a clean slate basis with all its liabilities that was of petitioner No. 1 Company prior to the transfer date, have now been fully extinguished as per the order of the order of the National Company Law Tribunal, Mumbai Bench, Court II (for short 'the NCLT'). 4. As per the NCLT's order dated 09.08.2021, the effective date of transfer was 20.06.2022. Subsequent to the petitioner No. 2 having acquired the assets of the petitioner No. 1 Company by way of liquidation proce....
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.... while allowing the petition, set aside the order passed by the department in the said case. 7. Learned counsel for the respondents on the other hand fairly conceded to the fact that petitioner No. 1 is a liquidated Company that is a going concern and the petitioner No. 2 was the acquired Company acquiring all the assets of the liquidated company by way of e-auction that was conducted and where the petitioner No. 2 was the highest bidder. Learned counsel for the respondents did not dispute the fact that the entire liabilities which stood on the corporate debtor prior to the order of the NCLT including those which were claimed and those which were not claimed all stood extinguished so far the Company which had acquired the assets of the corporate debtor. 8. Having heard the contentions put forth on either side and on perusal or records, at this juncture, it would be necessary to take note of the relevant portion of the order dated 09.09.2022 passed by the NCLT which reads as under: Prayer Clause No. Prayer Remark H) Direct that on and from the Transfer Date, all claims by any Government authority or department against the Corporate Debtor or any liabilities or obligations owe....
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....hall be binding on the Corporate Debtor and its employees, members, creditors, guarantors and other stakeholders. Such a provision is necessitated since one of the dominant purposes of the I&B Code is, revival of the Corporate Debtor and to make it a running concern. 66. The resolution plan submitted by successful resolution applicant is required to contain various provisions, viz., provision for payment of insolvency resolution process costs, provision for payment of debts of operational creditors, which shall not be less than the amount to be paid to such creditors in the event of liquidation of the Corporate Debtor under section 53; or the amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in sub-section (1) of section 53, whichever is higher. The resolution plan is also required to provide for the payment of debts of financial creditors, who do not vote in favour of 62 the resolution plan, which also shall not be less than the amount to be paid to such creditors in accordance with sub-section (1) of section 53 in the event of a liquidation of the Corporate....
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....tart with fresh slate on the basis of the resolution plan approved. 69. This aspect has been aptly explained by this Court in the case of Committee of Creditors of Essar Steel India Limited through Authorised Singatory (supra). "107. For the same reason, the impugned NCLAT judgment [Standar Chartered Bank v. Satish Kumar Gupta, 2019 SCC OnLine NCLAT 388] IN holding that claims that may exist apart from those decided on merits by the resolution professional and by the Adjudicating Authority/Appellate Tribunal can now be decided by an appropriate forum in terms of Section 60(6) of the Code, also militates against the rationale of Section 31 of the Code. A successful resolution applicant cannot suddenly be faced with "undecided" claims after the resolution plan submitted by him has been accepted as 65 this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution applicant who would successfully take over the business of the corporate debtor. All claims must be submitted to and decided by the resolution professional so that a prospective resolution applicant knows exactly what has to be paid in order that it may then t....
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....n issues raised by certain Members, the Hon'ble Finance Minister stated thus: "IBC has actually an overriding effect. For instance, you asked whether IBC will override SEBI. Section 238 provides that IBC will prevail in case of inconsistency between two laws. Actually, Indian courts will have to decide, in specific cases, depending upon the material before them, but largely, yes, it is IBC. There is also this question about indemnity for successful resolution applicant. The amendment now is clearly making it binding on the Government. It is one of the ways in which we are providing that. The Government will not raise any further claim. The Government will not make any further claim after resolution plan is approved. So, that is goint to be a major, major sense of assurance for the people who are using the resolution plan. Criminal matters alone would be proceeded against individuals and not company. There will be no criminal proceedings against successful resolution applicant. There will be not criminal proceedings against successful resolution applicant for fraud by previous promoters. So, I hope that is absolutely clear. I would want all the hon. Members to recognize this m....