TaxTMI 
TaxTMI 
2024 (12) TMI 1698
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.... Ispat & Energy Limited. 3. They have invoked the jurisdiction of this Court under Article 32 of the Constitution of India seeking a writ of certiorari for the purpose of getting the demand notice dated 18.11.2020 issued by the respondent no.2 herein quashed. 4. We take notice of the fact that the demand notice dated 18.11.2020 referred to above was issue to the corporate debtor namely Monnet Ispat & Energy Limited. The same reads thus:- "DIRECTORATE OF ENFORCEMENT PREVENTION OF MONEY LAUNDERING ACT & FOREIGN EXCHANGE MANAGEMENT ACT MINISTRY OF FINANCE - DEPT OF REVENUE GOVERNMENT OF INDIA Kaiser Hind, 4th Floor, Currimbhoy Road, Ballard Estate, Mumbai-400001 Tel: 022~22719935 F.No. PEN/T-5/01/DD/UKC/FEMA/2019/13287 Date: 18.11.2020 DEMAND NOTICE To M/s. Monnet Ispat & Energy Limited Monnet House, 11 Masjid Math, Greater Kailash, Part-II, New Delhi-110048 Sir, Sub : Notice for non-payment of M/s. Monnet Ispat & Energy Limited. In this context, it is to inform you that the penalty amount of Rs. 42,81,600/- (Rupees Forty Two Lakhs Eighty One Thousand Six Hundred Onl....
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....made by the Notices and I consider that the penalty amount as arrived below, will meet the ends of justice:- I) I impose a penalty of 10% of quantum of violation which is Rs. 42,81,600/- (Forty Two lakhs Eighty One Thousand Six Hudred Rupees only) on Monnet Ispat & Energy Limited, Monnet House, 11 Masjid Math, Greater Kailash Part-II, New Delhi-110 048, and II) I impose a penalty of 5% of quantum of violation which is Rs. 21,40,800/- (Twenty One lakhs Forty Thousand Eight Hundred Rupees only) on Shri Sandeep Jajodia, (Promoter cum Director), 3rd Floor, Mohta Building; 4,Bhikaji Cama Place, New Delhi-110066 for contravention of section 6(3)(b) of Foreign Exchange Management Act, 1999 read with clause (xii) of Schedule I of Regulation 21(2)(i) of The Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2004, by exceeding the ceiling limit imposed on the issue related expenses to the extent of Rs. 4,28, 16,000/- (US$9,60,000) r.w.s. Section 4291) of the Foreign Exchange. 7.2 The above penalties should be deposited in the office of the Joint Director, Zone I Directorate of Enforcement, Kaiser-1-Hind,4th Floor, Currimbhoy Road, ....
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....s from the corporate debtor, which are not a part of the resolution plan approved by the adjudicating authority? xxx xxx xxx 26. The petitioner Company is a corporate debtor in respect of which CIRP proceedings commenced in July 2017 and ended in July 2018, when NCLT approved [Monnet Ispat & Energy Ltd. Resolution Professional, In re, 2018 SCC OnLine NCLT 23789] the resolution plan submitted by a consortium of Aion Investment (P) Ltd. and JSW Steel Ltd. ("Aion-JSW" for short). Prior to approval by NCLT, CoC had granted approval to the said resolution plan by a voting majority of 98.97%. It is the contention of the petitioner that in accordance with the provisions of the I&B Code, RP had made a public announcement thereby, inviting claims from the creditors. Contending that the demand notices issued by the respondents for recovery of service tax towards royalty, District Mineral Foundation ("DMF" for short) and National Mineral Exploration Trust ("NMET" for short) against the iron ore purchased by the petitioner Company are contrary to the law laid down by this Court in Essar Steel (India) Ltd. (CoC) v. Satish Kumar Gupta [Essar Steel (India) Ltd. (CoC) v. Satish K....
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.... for the payment of debts of financial creditors, who do not vote in favour of 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 debtor. Explanation 1 to clause (b) of sub-section (2) of Section 30 of the I&B Code clarifies for the removal of doubts that a distribution in accordance with the provisions of the said clause shall be fair and equitable to such creditors. The resolution plan is also required to provide for the management of the affairs of the corporate debtor after approval of the resolution plan and also the implementation and supervision of the resolution plan. Clause (e) of sub-section (2) of Section 30 of the I&B Code also casts a duty on RP to examine that the resolution plan does not contravene any of the provisions of the law for the time being in force. 67. Perusal of Section 29 of the I&B Code read with Regulation 36 of the Regulations would reveal that it requires RP to prepare an information memorandum containing various details of the corporate debtor so that the resolution applicant submitting a plan ....
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....ealt with as individuals for their criminality but not the new bidder who is trying to restore the company. So, that is very clear." (emphasis supplied) 80. It could thus be seen that in the speech the Hon'ble Finance Minister has categorically stated that Section 238 provides that the I&B Code will prevail in case of inconsistency between two laws. She also stated that there was question about indemnity for successful resolution applicant and that the amendment was clearly making it binding on the Government. She stated that the Government will not make any further claim after the resolution plan is approved. So, that is going to be a major sense of assurance for the people who are using the resolution plan. She has categorically stated that she would want all the Hon'ble Members to recognise this message and communicate further that the I&B Code gives that comfort to all new bidders. They need not be scared that the taxman will come after them for the faults of the earlier promoters. She further states that once the resolution plan is accepted, the earlier promoters will be dealt with as individuals for their criminality but not the new bidder who is try....
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.... xxx xxx xxx 98. It is a cardinal principle of law that a statute has to be read as a whole. Harmonious construction of clause (10) of Section 3 of the I&B Code read with clauses (20) and (21) of Section 5 thereof would reveal that even a claim in respect of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority would come within the ambit of "operational debt". The Central Government, any State Government or any local authority to whom an operational debt is owed would come within the ambit of "operational creditor" as defined under clause (20) of Section 5 of the I&B Code. Consequently, a person to whom a debt is owed would be covered by the definition of "creditor" as defined under clause (10) of Section 3 of the I&B Code. As such, even without the 2019 Amendment, the Central Government, any State Government or any local authority to whom a debt is owed, including the statutory dues, would be covered by the term "creditor" and in any case, by the term "other stakeholders" as provided in subsection (1) of Section 31 of the I&B Code. xxx xxx xxx Conclusion ....
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....f the I&B Code. The petitioners had also requested for refund of an amount of Rs. 5,25,15,880 deposited as advance against supply of iron ore. 144. In this background, the petitioners have approached this Court challenging the demand notice dated 20-7-2018 and 28-4-2020. 145. The present case would also be covered by the view taken by us hereinabove. 146. It is further to be noted that the Income Tax Authorities had approached this Court with respect to income tax dues concerning the present petitioner by way of Special Leave Petition (Civil) No. 6483 of 2018. This Court passed the following order in the said special leave petition on 10-8- 2018 [CIT v. Monnet Ispat & Energy Ltd., (2018) 18 SCC 786 : (2019) 3 SCC (Civ) 252] : (Monnet Ispat & Energy Ltd. Case [CIT v. Monnet Ispat & Energy Ltd., (2018) 18 SCC 786 : (2019) 3 SCC (Civ) 252], SCC pp. 786-87, paras 1-3) "1. Heard. Delay, if any, is condoned. 2. Given Section 238 of the Insolvency and Bankruptcy Code, 2016, it is obvious that the Code will override anything inconsistent contained in any other enactment, including the Income Tax Act. We may also refer in this connection to Dena ....