TaxTMI 
TaxTMI 
2025 (8) TMI 724
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....other relevant law, resulting in an error apparent on the face of the record. 2. For clarity, the operative portion of the Division Bench's order under review is reproduced below: "Heard Mr. Ray, learned counsel for the Petitioner and Mr. S.S.Mohapatra, learned Standing Counsel for the Income Tax Department. In this writ application, the petitioner has prayed to quash the order of assessment dated 18.03.2024 vide Annexure-1 as well as the Demand Notice dated 18.03.2014 vide Annexure-2. Learned counsel for the petitioner submits that similar question has been considered by the National Company Law Tribunal, Kolkata passed in C.P. (IB) No.16/KB/2017 dated 07.11.2017 and that too the same has been approved by the National Company Appellate Tribunal and incidentally the period of which the benefit the petitioner is asking for is covered by the appellate authority of NCLT, Kolkata. Therefore, the assessment made by the authority cannot be claimed by the petitioner as per the demand raised. Mr. Mohapatra, learned counsel for the Income Tax Department contended that the petitioner cannot come against the order of assessment 2014 before this Court by ....
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.... 2016 (IBC) before the National Company Law Tribunal (NCLT), Kolkata Bench, against the petitioner-company. The application was admitted, and Mr. Binit Kothari was appointed as the Interim Resolution Professional (IRP). Upon admission of the application, the NCLT, by invoking Section 13(1)(a) read with Section 14 of the IBC, imposed a moratorium prohibiting the following actions: "(a) The Institution of suits or continuation 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; (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 action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act,2002 (54 of 2002); (d) The recovery of any property by an owner or less or where such property is occupied by or in the possession of the corporate ....
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....e from past liabilities not forming part of the said plan. However, by judgment dated 02.03.2020, a Division Bench of this Court dismissed the writ petition. Aggrieved by the said dismissal and alleging non-consideration of binding provisions and precedents under the IBC, the petitioner has now approached this Court by way of the present review petition. II. PETITIONER'S SUBMISSIONS: 12. Learned counsel for the Petitioner(s) earnestly made the following submissions in support of his contentions: (a) The Division Bench of this Court has committed error in dismissing the Writ Petition as the impugned order has been passed without taking into consideration the provisions under Sections 14 and 15 of the Insolvency and Bankruptcy Code, 2016 and Section 238 of the said Code. The said Sections of the Code are extracted hereunder: "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 inc....
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....a surety in a contract of guarantee to a corporate debtor.] (4) The order of moratorium shall have effect from the date of such order till the completion of the corporate insolvency resolution process: Provided that where at any time during the corporate insolvency resolution process period, if the Adjudicating Authority approves the resolution plan under sub-section (1) of section 31 or passes an order for liquidation of corporate debtor under section 33, the moratorium shall cease to have effect from the date of such approval or liquidation order, as the case may be. 15. Public announcement of corporate insolvency resolution process.- (1) The public announcement of the corporate insolvency resolution process under the order referred to in section 13 shall contain the following information, namely: - (a) name and address of the corporate debtor under the corporate insolvency resolution process; (b) name of the authority with which the corporate debtor is incorporated or registered; (c) the last date for submission of [claims, as may be specified]; (d) details of the interim resolution professional who shall be....
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....ain object and purpose of the IBC, namely, to complete the "corporate insolvency resolution process" in a time−bound manner, shall be frustrated. The sum and substance of the above discussion would be that the provisions of the IBC would have an over−riding effect over the Tea Act, 1953 and that no prior consent of the Central Government before initiation of the proceedings under Section 7 or Section 9 of the IBC would be required and even without such consent of the Central Government, the insolvency proceedings under Section 7 or Section 9 of the IBC initiated by the operational creditor shall be maintainable." (Emphasis Supplied) (e) The Division Bench of this Court has also failed to take into consideration of the judgment of the Supreme Court passed in the case of Committee of Creditors of Essar Steel Ltd. Vs. Satish Kumar Gupta and Others AIRONLINE 2019 SC 1494 decided on 15.11.2019, wherein the Supreme Court held as follows: "A successful resolution applicant cannot suddenly be faced with "undecided" claims after the resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty am....
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....nnot come against the order of assessment passed for the assessment year 2011-12 dated 18.03.2014 before this Court by filing the Writ Petition because remedy is available under law to approach the appellate forum. Instead of approaching the appellate forum, the petitioner should not have filed Writ Petition before this Court. He further submitted that as no error apparent on the face of the record is found, the RVWPET filed by the Petitioner may not be entertained by this Court. IV. COURT'S REASONING AND ANALYSIS: 14. We have carefully considered the rival submissions and perused the material on record. The petitioner seeks to review of the order dated 02.03.2020 on the ground that this Court, while dismissing the writ petition, failed to consider certain pertinent provisions of law and binding judicial pronouncements. It is argued that this omission amounts to an error apparent on the face of the record, justifying the invocation of review jurisdiction under Order XLVII Rule 1 CPC. 15. At the outset, it is necessary to reiterate the limited scope of review. A judgment may be open to review if there is a mistake or error apparent on the face of the record, or for some ana....
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.... resolution of corporate insolvency, maximizing the value of assets, and promoting entrepreneurship. It introduced a paradigm shift in how corporate debts and liabilities are treated upon reorganization. One of the key provisions is Section 31(1) of the IBC, which stipulates that once a resolution plan is approved by the Adjudicating Authority, it is binding on all stakeholders, including the Central Government, any State Government or local authority to whom a debt in respect of the corporate debtor may be owed. In 2019, an explanation was inserted to Section 31(1) to explicitly clarify this binding effect on governmental authorities. The logical corollary is that upon the plan's approval, no creditor (secured or unsecured, including tax authorities) can assert any claim against the debtor except as provided for in the plan. Furthermore, Section 238 of the IBC contains a sweeping non-obstante clause: "The provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force.." 18. The Supreme Court has consistently interpreted Section 238 to mean that IBC will prevail in case of any conflict wi....
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....sional 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 this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution applicant who 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 take over and run the business of the corporate debtor. This the successful resolution applicant does on a fresh slate, as has been pointed out by us hereinabove. For these reasons, the NCLAT judgment must also be set aside on this count." 21. The resolution applicant is entitled to rely on the finality and comprehensiveness of the resolution plan and proceed to revive the company on that basis. In other words, any claim which is not part of the resolution plan s....
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....t failed to lodge a claim, it ran the risk of having that claim extinguished. The approved Resolution Plan (07.11.2017) is now final and binding on the Department by virtue of Section 31(1) of IBC. 26. Notably, the Resolution Plan treated the corporate debtor's statutory tax liabilities in aggregate (Rs.30.71 crores) and the new management's takeover was predicated on the settlement and extinguishment of all prior claims as provided in the plan. Therefore, any demand or notice issued by the tax authorities outside the plan for a pre-CIRP period is ipso jure unenforceable. In our view, the Income Tax Department cannot resurrect the impugned assessment order and demand notice against the corporate debtor after the approval of the plan. In order to allow such action would directly contravene the IBC's mandate and the authoritative pronouncements of the Supreme Court discussed above. In sum, the continuance of the 18.03.2014 assessment order and demand notice is barred by law, the debt underlying these stands extinguished by operation of the IBC. 27. We also find merit in the petitioner's submission that the existence of an alternative remedy under the Income Tax Act did not prec....