TaxTMI 
TaxTMI 
2026 (5) TMI 760
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....inergy International Pvt. Ltd. ("Corporate Debtor") came to be approved under the provisions of the Insolvency and Bankruptcy Code, 2016. The appeal has been filed by the Appellant authority challenging the Impugned Order on the ground that it has been erroneously treated as an "Operational Creditor" instead of a Secured Creditor under Section 53(1)(b)(ii) of the Code, despite the statutory charge and lien created under the provisions of the GVAT Act and the law laid down by the Hon'ble Supreme Court in State Tax Officer Vs Rainbow Papers Ltd. [(2023) 9 SCC 545] and its subsequent review judgment [(2024) 2 SCC 362]. FACTS 2. The minimum facts which are relevant for the current purposes may now be stated: a) On 09.02.2023, the Corporate Debtor, Vinergy International Pvt. Ltd., was admitted into Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016. b) Prior to commencement of CIRP, the appellant authority had issued a notice dated 03.06.2021 under Section 44 of the Gujarat Value Added Tax Act, 2003 (henceforth would be termed as GVAT Act), thereby creating a lien over the bank account of the Corporate Debto....
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....n Laddha [Comp. App. (AT) (Ins) No. 720 of 2021] and Amar Nath Vs. Excise & Taxation Commissioner [Comp. App. (AT) (Ins) No. 221 of 2023], where it was held that failure to treat statutory dues as secured debts in contravention of the dictum in Rainbow Papers case amounts to material irregularity and vitiates the resolution plan. 4. Per contra, both the learned counsel for the Respondents (the Resolution Professional and Successful Resolution Applicant) submitted: a) The plan was approved based on the Information Memorandum prepared during the CIRP, and that appellant, at all times, was treated only as an Operational Creditor and the plan was submitted on the basis of this classification, and therefore cannot be faulted for the same. b) The Appellant is estopped from challenging the impugned order at this stage, as it had failed to raise any objection to the Resolution Plan before the Adjudicating Authority. Despite being aware of the proceedings, the Appellant neither opposed the approval of the Resolution Plan nor sought any modification therein. It is submitted that in contrast to Rainbow Papers case where objections were raised at the appropriate stage, the....
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....ated as a secured debt and if the Sale Tax Department should be treated as a secured creditor. After all the Rainbow Papers gives the solution as an arithmetic formula. But there are few more issues, which include the how the appellant had chosen to prefer its claim, and its impact on its contention. 6. A cursory glance at the claim of Rs. 15,65,92,673/- made by the appellant informs that it is a composite claim of VAT + CST + interest thereon. Therefore, Sec.48 of the Gujarat VAT Act creates a statutory charge only for VAT claim, and hence the same benefit cannot be extended to CST component of the claim. In other words, out of the total claim of Rs. 15,65,92,673/- the VAT component is Rs. 3, 41,74,431/- 7. However, in column 5 of the Claim made in Form B, where a claimant is required to disclose the details of any security held and its value etc., the appellant has indicated 'NA', signifying this column does not apply to it. The respondents contend that the appellant having consciously taken a position that it does not claim any security interest in terms of Sec.48 of the Gujarat VAT Act, it is estopped from claiming the status as a secured creditor. 8. The issue now ari....
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....different scope and application." The maxim ignorantia juris non excusat (ignorance of the law excuses no none), applies to all penal laws or statutes that create a liability, does not apply to civil law. In the context of the IBC, is the RP and the CoC bound to know the Gujarat VAT Act? They are statutorily created for the purpose of only maximising the asset value of the CD and to sell it as a going concern to the SRA in a manner which the Code has designed and structured and not to administer the Gujarat VAT Act. 10. Therefore, even though the conduct of the appellant in indicating in Form B in the column where it is required to provide the details of the security interest as 'N.A', may not amount to waiver of what the statute has consciously created, yet the appellant is duty bound to inform the RP about the statutory charge which Sec.48 of the Gujarat VAT Act has created. After all, as stated earlier, there is no presumption the RP knows the provisions of the said Act. 11. However, the RP himself has provided a twist with his I.A. No. 4517 of 2023 which he had taken out inter alia against the appellant for removing the lien created over the asset of the CD. This appli....