TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 222
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....ated to the Appellant via e-mail of the Liquidator on 19.03.2025, on the grounds narrated therein, that the claim of the Customs Department stood rejected because there was a delay of 787 days in filing of the claim. In the application thus preferred by the Applicant/Appellant herein, had prayed for the following reliefs: - "i. To condone the delay of 787 days in filing the Annexure A6 claim before the 1st Respondent. ii. To issue directions to the Respondent No.1/Liquidator to accept the Annexure A6 claim submitted by the Appellant." 3. The reliefs were in the shape of seeking condonation of 787 days of delay in filing, the claim before the Liquidator, and further it contained a relief for issuing directions to the Liquidator to accept the claim that was submitted by the Appellant. Looking into the nature of the relief, which has been modulated by the Appellant, in the proceedings before the Ld. Adjudicating Authority in CA(IBC)/6/KOB/2025, it showed that, the Appellant admits the fact that, there was a delay of 787 days in filing the claim and that is why the condonation was sought by the Appellant, and it was thereafter only after condonation of delay the Ap....
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...., under the export obligation as created under the Export Promotion Capital Goods Scheme, and the liability as fastened by the order of 25.06.2009, that was put to challenge by the Corporate Debtor by filing a proceeding by way of an Appeal No. 119/2013, preferred under Section 128A of the Customs Act, 1962, before the Commissioner of Customs (Appeals), Cochin. The aforesaid company appeal under Section 128A was decided by the Appellate Authority by the Judgment dated 09.10.2013. 8. Being aggrieved against the order dated 09.10.2013, by which the Commissioner of Customs had dismissed the Appeal and upheld the original order of Assistant Commissioner of Customs, dated 25.06.2009, and thereafter the Respondent No.2 (Corporate Debtor) is said to have further agitated his grievances by preferring an Appeal being Appeal No.20906/2024, before the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Bangalore, by filing the same under Section 129E of the Customs Act, 1962. This Appeal had been directed to be abated and was closed by an order passed on 26.09.2024, meaning thereby, the aspect of fastening of the liability on the Corporate Debtor and the Appellant's entitlement of c....
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....contemplates an invitation of the claim and it refers as to what would be the outer limit during which the claim could be submitted, which prescribes for that the last date of submission of the claim would as may be specified. The use of word "specified" under Section 15(1)(c) has been defined under the I & B Code, which means that, it has had to be specified in accordance with the definition given under Section 3(32) of the I & B Code, wherein the word "specified" has been described as under: - "(32) "specified" means specified by regulations made by the Board under this Code and the term "specify" shall be construed accordingly;" 10. It could be inferred that, in accordance with the definition of the word "specified" given therein under the Code, it would mean that, the specification and time restrictions as prescribed by the Regulations made by the Board under this Code. For the instant purpose, the Regulations herein would be deemed to be the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The said Regulations in its Chapter IV and in its Regulation 12 provides for submission of proof of claims. It pr....
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....of a public announcement in the shape of Form-B as statutorily contemplated under Schedule II, the last date of submission or updating the claim shall be made within 30 days from the date of the liquidation commencement. The manner in which law has been modulated, the provision it is mandatory, looking at the aspect of time being the essence of the I & B Code. 13. The use of the word "shall" as given under the Regulation 12 of IBBI (Liquidation Process) Regulations, 2016, makes the provision particularly as to be mandatory. Admittedly, in the case at hand, the Appellant was already pursuing the proceedings initiated at the behest of the Corporate Debtor under Section 128A and 129E of the Customs Act, 1962, by way of an Appeal before the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), which was directed to be abated by an order that was passed on 26.09.2024. Once the knowledge of the aforesaid proceeding could be inferred to the Appellant, from the proceedings having being dismissed as having abated, where the Appellant was resorting to the remedies for recovery of the same dues of an amount of duty payable as per the provisions contained under the Customs Act, 1962, i....
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....the Corporate Debtor has been put to liquidation, is directory in nature and not mandatory. For the aforesaid purpose, the Ld. Counsel for the Appellant had relied upon the judgment of State Tax Officer (1) Vs. Rainbow Papers Limited, MANU/SC/1109/2022, and particularly had made reference to para. 39 which is extracted hereunder: - "39. The Adjudicating Authority (NCLT) and the Appellate Authority (NCLAT) have held that the claim of the State is belated. Regulation 12 of the 2016 Regulations deals with the time period of submission of a claim along with proof, as stipulated in the public announcement Under Section 15 of the IBC. The time period is, however, not mandatory but only directory." 18. We are of the view, that if the controversy taken therein Rainbow Paper Mills (supra) is taken into consideration, the Hon'ble Apex Court therein was seized with an Appeal as prescribed under Section 62 of the I & B Code, as against the order dated 19.12.2019. The brief facts are that the Resolution Applicant had filed an amended Resolution Plan on 26.05.2018, as the case therein was, that it had granted an approval under Section 30(6), to be read with Section 31 of the I & B Co....
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....r Section 5(21). The claim of the Appellant also does not fall within the meaning of 'Secured Creditor' as defined under Section 3(30) read with Section 3(31) of the I&B Code *** 38. In view of Statement of Objects and Reasons of the 'I&B Code' read with Section 53 of the 'I&B Code', the Government cannot claim first charge over the property of the 'Corporate Debtor'. Section 48 cannot prevail over Section 53. Therefore, the Appellant - 'State Tax Officer-(1)' do not come within the meaning of 'Secured Creditor' as defined under Section 3(30) read with Section 3(31) of the I&B Code' 39. Further, as 'Sales Tax Department' filed its claim at belated stage after the plan had been approved by the 'Committee of Creditors', the 'Resolution Professional' had no jurisdiction to entertain the same and rightly not entertained." 20. It was further observed that, since the claim was belated and the plan has already stood approved by the CoC, it was held by Ld. NCLT and NCLAT that there was no jurisdiction to entertain the same. The Hon'ble Apex Court has taken a different view that the delay in filing a claim cannot be the sole ground for rejecting the claim. The ....
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....t, in the instant case there was no reasoning whatsoever which was assigned by the Appellant before the Ld. Tribunal, while pursuing his proceeding under Section 42, the Ld. Tribunal observed that, and rightly so too, that in the absence of any reasonable explanation even if the concept of the provisions of limitation as contained under Regulation 12 is taken as to be directory in nature, then too even if the provision are taken to be directory in nature doesn't exonerate the Appellant from giving a reasonable explanation to satisfy the reasons for delay, and that too particularly, which happens to be unprecedented of 787 days from the date of the liquidation. 23. This particular number of days of delay becomes more relevant for the reason being that, if the period of 30 days, as contemplated under Regulation 12 (2) (b) of Liquidation Regulations, is taken into consideration for the purposes of filing a claim, it is the case of the Appellant, that if it is determined from the date of closure of the proceedings of the CESTAT on 26.09.2024 and filing of a much belated claim at a belated stage, i.e., on 12.03.2025, then too it was much beyond the period prescribed therein and for t....
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....bjective of the I & B Code, where time is the essence of the provisions of law. If such type of claim is permitted to be entertained, it defeats the very objective of the Code of an expeditious completion of the insolvency and the liquidation processes. Thus, pendency of appeal or the Appellant being the government body cannot be treated as to be a sufficient reason, even if we accept the principle that the provisions contained under Regulation 12 (2) (b) is directory in nature. 26. The Ld. Counsel for the Appellant had argued the controversy from yet another perspective contending thereof that, this Appellate Tribunal has got enough discretionary powers to condone the delay. We are of the considered view that, when a statute prescribes to do an act in a specified time frame, it has had to be done in accordance with the mandate of the statute within the specified time frame and discretion doesn't come into play, where a human factor of determination of limitation could dominate the process of determining the limitation, because the aspect of human determination has no scope under law, particularly when it has a possibility of distortion of law, which is not the scope open to be ....
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....nder the given circumstances. The same cannot be permitted to be introduced at a belated stage, more particularly when it was likely to prejudice the entire proceedings, which has reached up to the stage of Section 53 of the I & B Code, entailing the finality of the liquidation process, where distribution of assets under Section 53 of the I & B Code, was in progress. If such type of delay is condoned and the clock is put back to consider the belated claim of the Appellant, in the exercise of its Appellate jurisdiction under Section 42 of the I & B Code, as against the order of rejection of claim by the Liquidator, that will amount to putting the clock back, which is not the intention of the I & B Code, rather it runs contrary and defeats the very spirit of the special statute, which has got an overriding effect to the general law. 30. Apart from the observations made above, the records revealed that the Appellant had already determined the duty or the liability that was payable under the customs act as against the Corporate Debtor, which being the reason for the Corporate Debtor to file an Appeal before the Commissioner and thereafter before the CESTAT. Mere pendency of an Appea....