TaxTMI 
TaxTMI 
2026 (10) TMI 241
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.... together with interest under Section 50 and penalty of Rs. 16,87,806/-, on the allegation of excess availment of IGST input tax credit on imported goods in Financial Year 2021-22. The petitioner also questions a notice dated 13th January, 2026 demanding interest under Section 50 of the CGST Act for alleged delayed filing of GSTR-3B returns for July and August, 2021. 2. The petitioner's case is that every one of these demands relates to a period before 11th August, 2023, the date on which the National Company Law Tribunal approved the resolution plan in its corporate insolvency resolution process. In any event no claim in respect of these dues was ever lodged in that process. By force of Section 31(1) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "the IBC" or "the Code of 2016"), as authoritatively construed by the Supreme Court, the dues stood extinguished and no proceeding in respect of them could thereafter be initiated or continued. 3. The material facts are not in dispute and are recorded in the impugned order in original itself. On an application by the Reserve Bank of India under Section 227 read with Section 239(2)(zk) of the Code of 2016....
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....6, the decisions of the Supreme Court and the Board's own circulars. Thereafter, the respondent no.2, by the Order-in- Original dated 29th December, 2025, confirmed the demand of IGST. The order expressly records that the petitioner was under CIRP from 8th October, 2021 to 11th August, 2023, that no GST claim for the period was lodged before the Resolution Professional and that the resolution plan stood approved by the Adjudicating Authority, but nonetheless proceeds to confirm the demand on the footing that the cause of action arose after the moratorium. 7. By a separate notice dated 13th January, 2026, interest under Section 50 was demanded for alleged delay in filing GSTR-3B returns for July and August, 2021, which the petitioner answered on 22nd January, 2026 by reiterating the bar of extinguishment. 8. Learned Advocate appearing for the petitioner have submitted that Section 31(1) of the Code of 2016, binds the Central Government and every authority to whom statutory dues are owed. Under Section 238 the Code of 2016, overrides anything inconsistent in any other law, reliance in this regard has been placed on the case of Principal Commissioner of Income Tax v. Monnet ....
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....e machinery of determination. Section 238 of the Code of 2016, overrides only to the extent of actual inconsistency, and there is none between determining the liability and leaving its enforceability to the Code. No coercive action was taken during the moratorium. Alternatively, the adjudication itself ought not to be quashed and the Court may at best hold that recovery is subject to the approved plan. 11. Section 31(1) of the Code of 2016, as it stands after the amendment of 16th August, 2019, provides that the resolution plan approved by the Adjudicating Authority "shall be binding on the corporate debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the resolution plan". The CGST authorities are included. 12. The consequence of approval was explained by a Bench of Three Learned Judges of the Hon'ble Apex Court in the case of Ghanashyam Mishra (supra). 13. The rationale had earlier been stated by the Hon'b....
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....ovided therein. The plan, having been approved under Section 31 of the Code of 2016 and having attained finality, binds the respondents contractually as well as statutorily. 18. The respondents' case rests on Sundaresh Bhatt (supra). On a careful reading, that decision does not support them. 19. The case of Sundaresh Bhatt (supra). was concerned with the period while the moratorium operated under Sections 14 and 33(5) of Code of 2016 in a liquidation, where the corporate debtor's liabilities are not extinguished but are paid out of the liquidation estate in the order of priority under Section 53. 20. In the case of Sundaresh Bhatt (supra) it was held that demand notices are "an initiation of legal proceedings against the corporate debtor". Ghanashyam Mishra (supra) bars not only recovery but the initiation or continuation of "any proceedings" in respect of an extinguished claim. The respondents' distinction between adjudication and recovery cannot survive. Nor, for that matter, is the impugned order a mere academic quantification: it confirms a demand under Section 73(9), levies interest and imposes penalty, and is accompanied by a summary in Form GST DRC-07, w....