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2024 (5) TMI 1151
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....nal, Ahmedabad Bench (in short 'Adjudicating Authority') in IA No. 735/NCLT/AHM/2023 in IA No. 435/NCLT/AHM/2023 in CP(IB) No. 66/NCLT/AHM/2017, whereby the Adjudicating Authority rejected the application of the Appellant to treat its claim as Secured Creditor during the liquidation under waterfall arrangement as stipulated in Section 53 of the Code. 2. Mr. Ramchandra Dallaram Chaudhary is the Liquidation (in short 'Respondent' herein) of M/s Anil Limited ('Corporate Debtor'). 3. Heard the Counsel for the Parties and perused the records made available including the cited judgements. 4. It has been brought out that the Corporate Debtor was admitted into Corporate Insolvency Resolution Process (in short 'CIRP') vide the Adjudicating Authority its Order dated 23.08.2017 and moratorium came into effect same day. 5. The Resolution Professional published a public announcement on 28.08.2017 inviting claims from all by stipulating the last date of claim filing as on 06.09.2017. It has been stated that in the public announcement, it was indicated that the estimated date for closure of CIRP would be 19.02.2018. 6. It is further submitted that due to no resolution of the Corpor....
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....missioner of State Tax states that they have considered the aspect of applicability of the judgment passed by Hon'ble Supreme Court in Rainbow Papers Limited, and on the assurance from the liquidator to treat it as a secured creditor in view of the said judgment they have lift the attachment within a specific time period. Let the affidavit be filed within five days, and with the time line of lifting the attachments within a week." (SIC.) 13. The Appellant elaborated that based on the Order of the Adjudicating Authority dated 22.11.2022, it was understanding on his part that the claims would be considered in the category of Secured Creditors. The Appellant submitted that to his shock the Respondent again sent a letter to the Appellant on 22.06.2023 and informed about the rejection of the Appellant's claim for AY 1994 to 98 and for AY 2013 to 2017 and thereby admitting claims of the AY 2007 to 2012. The Respondent also sent a communication vide letter dated 26.06.2023 to the Appellant reiterating that the claims of the Appellant have been rejected. 14. The Appellant thereafter filed an I.A. No. 435 of 2023 seeking that he may be declared as Secured Creditors for his entire ....
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....d curtail its applicability is now interpreted in the review petition against Rainbow Papers (Supra) in Sanjay Kumar Agarwal v. State Tax Officer [(2024) 2 SCC 362], on the ground that such subsequent decision cannot be a ground for review and co-ordinate bench ought not to have commented bench/It upon decision of another co-ordinate bench. 20. The Appellant attempted to argue that his demands for the amount for AY 2013-14, 2014-15, 2015-16 and 2016-17 were sent after the date of closure of CIRP and thereafter it cannot be said that the merely because the Respondent was not able to adhere the timelines given the public announcement, the Appellant should have not filed his claims or legal demands due to alleged moratorium period. 21. The Appellant submitted that it is a failure of the Respondent not to complete the CIRP or liquidation process within the stipulated time and therefore the Appellant cannot be put to any adverse situation invoking continuing moratorium. The Appellant also stated that his attachment are legal and valid as per VAT Act and belong to the prior CIRP period hence should not have been affected by the moratorium. 22. The Appellant pleaded that the Code....
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....he BLRC and not Sales Tax Act. 26. The Appellant assailed the conduct of the Respondent as he has admitted the partial claims of the Appellant for the AY 2007-08, 2008-09, 2009-10, 2010-11, 2011-12 and 2012-13 in terms of judgment of the Hon'ble Supreme Court of India in the matter of Rainbow Paper (Supra) according to which dues of the government are secured dues and has recognized as Secured Creditors by virtue of Section 48 of the VAT Act. The Appellant further submitted that the decision of Rainbow Paper (Supra) has been upheld in the revenue case of Sanjay Kumar Agarwal Vs. State Tax Officer & Ors. [(2024) 2 SCC 362]. However, the Respondent rejected the other claims of the Appellant on the ground that these years are covered by old laws of Sales Tax Act hence there is no pari-materia provisions like Section 48 of the VAT Act and therefore the Appellant was treated as Unsecured Creditors. 27. It is a case of the Appellant that merely because the equivalent provision of Section 48 of the VAT Act was not present in Sales Tax Act does not take away his rights to be treated as Secured Creditors. 28. The Appellant pleaded that it is a spirit and the intention of the statut....
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.... focus the attention of the parties, or its own attention on that claim or relief, by framing an appropriate issue. As a result the defendant does not get an opportunity to place the facts and contentions necessary to repudiate or challenge such a claim or relief. Therefore, the court cannot, on finding that the plaintiff has not made out the case put forth by him, grant some other relief. The question before a court is not whether there is some material on the basis of which some relief can be granted. The question is whether any relief can be granted, when the defendant had no opportunity to show that the relief proposed by the court could not be granted. When there is no prayer for a particular relief and no pleadings to support such a relief, and when defendant has no opportunity to resist or oppose such a relief, if the court considers and grants such a relief, it will lead to miscarriage of justice. Thus it is said that no amount of evidence, on a plea that is not put forward in the pleadings, can be looked into to grant any relief." 35. The Respondent submitted that he has acted completely as per law and followed various sections of the Code and the relevant regulations. ....
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....I.A. No. 735 of 2023 and no reliefs were sought by the Appellant from the Adjudicating Authority. Hence, at this stage, such pleading need to be rejected. 43. The Respondent submitted that through I.A. No. 735 of 2023, the Appellant, in fact, acknowledged and admitted that the treatment of its claim by the Liquidator being correct on the rationale that the old Assessment orders were under Section 67 of the Gujarat Sales Tax Act, 1969 and as the said enactment doesn't contain pari-materia stipulation akin to Section 48 of the Gujarat Value Added Tax Act, 2003, creating a first charge on the payable amount, therefore the decision of Apex Court rendered in case of Rainbow Paper Judgment would not be applicable to claims the of old Assessment Years. 44. The Respondent admitted that in terms of the Judgement of Rainbow Papers (Supra) few claims of the Appellant are covered under VAT Act, which are to be treated as secured debts and same treatment has been given by the Respondent. 45. It is strong pleading of the Respondent that the cases which are not covered either by Section 48 of the VAT Act and by Rainbow Papers (Supra) could not have been considered by him as Secured C....
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....spondent vide communication dated 22.06.2023 in relation to the said claim. The Appellant also vide letter dated 23.06.2023 confirmed its status as Unsecured Creditor for the aforesaid period. 53. The Respondent has considered the claim of the Appellant for the period from AY 2007-08 to 2012-13 as a 'Secured Creditor'. As regards, the AY 2007-08 the assessment order was passed on 17.03.2012, in relation to the AY 2008-09 the assessment order was passed on 20.09.2012, in relation to the AY 2009-10 the assessment order was passed on 15.06.2013, in relation to the AY 2010-11 the assessment order was passed on 31.03.2015 and in relation to the AY 2012-13, the assessment order was passed on 31.03.2017. 54. As all the assessment orders were passed before the initiation of CIRP of the Corporate Debtor particularly before declaration of moratorium under the provisions of the Code, the said claim for the aforesaid Assessment Year from AY 2007-08, 2008-09, 2009-10, 2010-11 and 2012-13, were considered as a Secured Creditor in view of the judgment passed by the Hon'ble Supreme Court of India in the matter of Rainbow Paper (Supra). 55. The claims of the aforesaid duration is u....
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....fact that assessment order with respect to claim of AY 2015-16 and 2016-17 were passed in Moratorium Period and further, the Appellant requested the Respondent to consider the claim with respect to period of AY 2013-14 and 2014-15 as "Secured claim". 61. It seems that the Reply of the Appellant to the Respondent vide letter dated 23.06.2023 is very significant and directly connected to present appeal. Hence, it would be desirable to look into same and the letter reads as under : - Hence the Appellant clearly acknowledged in Para 2 that AY 1994-95 to 1997 to 98 do not full as Secured Creditor. "2. Considering the said calculation, the claim of the department for AY 1994-95 to 97-98, undisputedly falls under the Gujarat Sales Tax Act, 1969 and not under the Gujarat Value Added Tax Act, 2003. Hence, for the said period State Tax Department would not fall within the purview of "Secured Creditor" as per the decision of the Hon'ble Apex Court in the case of Rainbow Paper being Civil Appeal No. 1661 of 2020." (Emphasis Supplied) Similarly the Appellant accepted that the issue AY 2014-15, 2015-16 and 2016-17 is post moratorium period :- "5. It is nec....
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....he corporate debtor any of its assets or any legal right or beneficial interest therein' from the declaration of Moratorium. For this reason, the assessment order dated 30.03.2018 & 31.07.2018 is found to be in contravention of Section 14(b) of the Code. The submission of the Appellant that the CIRP period ends on the 19.02.2018 as per estimated date of closure of CIRP provided in Form A 'Public Announcement of the Corporate Debtor cannot be accepted. 65. It is also observed that the assessment orders for the AY 2015-16 & 2016-17 came to be passed by the Appellant on 29.11.2019 & 23.03.2020, respectively after passing of order of liquidation of Corporate Debtor i.e., 25.10.2018 which was not permitted as per Section 33(5) of the Code which provides that Subject to section 52, when a liquidation order has been passed, no suit or other legal proceeding shall be instituted by or against the Corporate Debtor. Therefore, after liquidation order has been passed by the Adjudicating Authority the moratorium under Section 33(5) of the Code comes into effect which is further confirmed by the Apex Court in the matter of Sundaresi Bhatt (Supra). The relevant portion of this judgemen....
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.... A.Y. 2014-15, 2015-16 & 2016-17, the assessments were carried on during moratorium. 67. It has been brough to notice that the Appellant passed attachment orders on the property of the Corporate Debtor i.e., 16.10.2018 in alleged and contravention of Section 14 of the Code & Regulation therein, even after order dated 15.06.2023 passed by Adjudicating Authority whereby, the Appellant was directed to lift the attachment within ten days of receipt of such intimation from the Respondent, however, till date, the Appellant continues illegally and unlawfully attachment on the subject property of the Corporate Debtor. This obviously is not in consonance with the law . 68. We also find logic in the pleadings of the Respondent that allowing such attachment over property during the subsistence of the moratorium, would undermine resolution of the Corporate Debtor and well prejudice the interests all stakeholders. This is found to be against the spirit of the Code. 69. We consciously note that the Appellant fairly conceded that his case to be partly covered by the Rainbow Paper (Supra) and the same fact has not been disputed by the Respondent. We also observe that the Respondent ple....
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..... 74. Since, ratio of Rainbow Paper (Supra) has been used by both , we will go through it and note the relevant paras. These reads as under :- "2. The short question raised by the appellant in this appeal is, whether the provisions of IBC and, in particular, Section 53 thereof, overrides Section 48 of the GVAT Act which is set out hereinbelow for convenience : " 48. Tax to be first charge on property. - Notwithstanding anything to the contrary contained in any law for the time being in force, any amount payable by a dealer or any other person on account of tax, interest or penalty for which he is liable to pay to the Government shall be a first charge on the property of such dealer, or as the case may be, such person." 29. As argued by the learned Solicitor General, the term "secured creditor" as defined under IBC is comprehensive and wide enough to cover all types of security interests, namely, the right, title, interest or a claim to property, created in favour of, or provided for a secured creditor by a transaction, which secures payment or performance of an obligation and includes mortgage, charge, hypothecation, assignment and encumbrance....
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....llant, he fairly concluded that this period was not covered in the ratio of Rainbow Paper (Supra). Hence the Respondent classified remaining admissible outstanding dues as Unsecured debts. The Adjudicating Authority, therefore, also passed the Impugned Order accordingly based on Resolution Plan put up for approval by CoC through the Respondent. We do not find any infirmity in the Impugned Order on this account. 76. In view of above detailed discussions, we do not find any merit in the appeal. The appeal stands dismissed. No Costs. Interlocutory Application(s), if any, are Closed. ============= Document 1 6. Details of claims amount examined and verified by Liquidator is given in table below: Details of claim amount examined and verified by Liquidator Sr. Financial No Year Amount of Tax (Rs.) Interest (Rs.) Total (Rs.) 1 1994-95 682532 1099643 1782175 Date of Assessment Order as per claim 13.10.2009 Remarks 2 1995-96 55922754 90098452 146021206 13.10.2009 3 1996-97 1153328 1858154 3011482 13.10.2009 4 1997-98 443117 713916 1157033 13.10.2009 5 2....
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[email protected] Ref. No.: STO-2/NCLT/ANIL LIMITED/2022-23/Outward no.499 GST NATION TAX MARKET Goods and Services Tax Date: 23/06/2023 To, CA Ramchandra Dallaram Choudhary (Insolvency Professional) Liquidator, 9/B, Vardan Complex, Near Vimal House, Lakhudi Circle, Navrangpura, Ahmedabad-380014. Sub: Details qua calculation provided pursuant to the interim order dated 15.06.2023 passed in IA No. 435 of 2023 In IA No. 501 of 2020 In CP(IB) No. 66 of 2017 by Hon'ble NCLT in the matter of Anil Ltd. Sir, 1. The State Tax Department is in receipt of the details along with the reasoning of the categorization qua the total claim amount (Tax Dues), provided by your good office to the department on 22.06.23, pursuant to the interim order dated 15.06.2023 passed in IA No. 435 of 2023 in IA No. 501 of 2020 in CP(IB) No. 66 of 2017 by Hon'ble NCLT Ahmedabad Bench in the matter of Anil Ltd. 2. Considering the said calculation, the claim of the department for AY 1994-95 to 97-98, undisputedly falls under the 3 Document 4 Gujarat Sales Tax Act, 1969 and not under the Gujarat Value Added Tax Act, 2....