TaxTMI 
TaxTMI 
2024 (12) TMI 294
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....ess (CIRP) against the Corporate Debtor, M/s. Bhagwan Motors Private Ltd., commenced by Order dated 21.06.2019. ii. The Commercial Tax Department issued a Notice dated 03.07.2019 under Section 128 of the Madhya Pradesh VAT Act, 2002, upon VE Commercial Vehicles Limited to pay sum of Rs.17,12,094/-. VAT amount due of Assessment Year 2014-15 of M/s. Bhagwan Motors Private Limited in response to Notice issued by Commercial Tax Department, the VE Commercial Vehicles Limited deposited the amount of Rs.17,12,094/- to the Commercial Tax Department. iii. The Resolution Professional (RP) filed an IA131/MP/2020 against the VE Commercial Vehicles Limited, Respondent No. 1 and Commercial Tax Officers as Respondent No. 2 under Section 43 read with Section 60(5) of the Insolvency and Bankruptcy Code, 2016, (for short `The Code' or `The IBC') for refund of the aforesaid amount from the Commercial Tax Department. iv. The Application I.A. 131/MP/2020 was opposed both by VE Commercial Vehicles Limited as well as the Commercial Tax Department pleading that the deposit of amount of Rs.17,12,094/- is not a Preferential Transaction within meaning of Section 43 and the Applicat....
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.... Corporate Debtor could not have been adjusted by payment of any VAT liability to the Appellant. After imposition of Moratorium it is not open for Appellant to recover any amount on account of the Corporate Debtor nor can it appropriate any amount towards its own dues. 6. We have considered the submissions of Counsel for the Parties and perused the record. 7. The Application I.A.131/MP/2020 was filed by the RP under Section 43 read with Section 60(5) of the Code. Amount deposited by M/s. VE Commercial Vehicles Limited to the Appellant of Rs.17,12,094/- was to discharge the liability of Corporate Debtor towards VAT Tax. The above amount was deposited by M/s. VE Commercial Vehicles Limited consequent to the Notice issued under Section 28(1) of the MP VAT Act, 2002. Section 28(1) of the MP VAT Act, 2002 provides as follows: "28: Special mode of recovery (1) Notwithstanding anything contained in Section 24 or any law or contract to the contrary, the Commissioner or any officer other than the officer appointed under clause (g) of subsection (1) of section 3, may at any time or from time to time, by a notice in the prescribed form a copy of which shall be sent to ....
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....y you as aforesaid as such payment is required to meet the amount due from the above said dealer in respect of arrears of Indore. Please Note that any payment made by you in compliance with this notice is in las deemed to have been made under the authority of the above named dealer and money receipt will constitute a good and sufficient discharge of your liability to the person to the extent of the amount specified in the receipt. Please note further that if you fail to make payment in pursuance of this notice, proceedings will be initiated to recover the said amount from you as an arrear of land revenue. A Copy of this notice is being sent to (dealer) (Name) M/s Bhagwan Motors Pvt Ltd., Indore TIN 23111503890 Commercial Tax Officer (Additional Tehsildar) Indore, Circle - 15" 9. We may first notice the applicability of Section 43 under which the Application was filed by the RP questioning the above transaction. Section 43(1) & 43(2) provides as follows: "43. Preferential transactions and relevant time.- (1) Where the liquidator or the resolution professional, as the case may be, is of the opinion th....
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....roach the Adjudicating Authority for avoidance of a preferential transaction if it is of the opinion that the corporate debtor has given a transaction preference at a relevant time. However, in the present case, payment of the VAT/GST by respondent no. 1, who is not a corporate debtor, can under no circumstances fall within the purview or be regarded as a preferential transaction created by the corporate debtor. (iv) NCLT, INDORE BENCH IA/130/MP/2020 & IA/131/MP/2020 in TP/125/MP/2019 [CP(IB)/159/2018 The contention of the resolution professional that the said deposit was made with the consent of the suspended management is false and hence denied. Respondent no.1 paid the aforesaid amount to the VAT/GST department in compliance with a notice issued by the concerned authorities dated 03.07.2019 under section 28(1) of the Madhya Pradesh VAT Act, 2002 and hence, for complying with the said notice and the applicable laws and regulations, respondent no. 1 did not require the consent of the management of the corporate debtor. (v) The claim made in the present application is strongly disputed. In this context, it is submitted from the latest statement of account of respo....
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....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;]..." 14. Present is a case where no recovery has been affected by Commercial Tax Department from the Corporate Debtor, the GST Tax Liability of the Corporate Debtor which was not satisfied by the Corporate Debtor was directed to be discharged by M/s. VE Commercial Vehicles Limited which has taken benefit of input tax without GST dues being deposited by the Corporate Debtor. As noted above, under Section 28 of the MP VAT Act, 2002, the recovery can be from any person who holds any money for on account of such dealer or person. M/s. VE Commercial Vehicles Limited has contended before the Adjudicating Authority that it has reversed input tax benefit taken by it by depositing the amount of Rs.17,12,094/-, since the Corporate Debtor did not deposit the GST amount. GST amount was paid by VE Commercial Vehicles Limited to the Corporate Debtor but the same was not remitted by the Corporate Debtor to the GST Auth....