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2020 (5) TMI 39 - JHARKHAND HIGH COURTValidity of Garnishee Order - CIRP proceedings are ongoing - failure to deposit taxes by Banks for the period from 2011-12 & 2012-13 - direction to Banks to pay into Government's treasury, on account of tax / penalty due under the JVAT Act - resolution plan approved - According to the petitioner, since no claim was made by the State Government as regards the aforesaid tax liability in the corporate insolvency resolution process - bar on realisation of the amount under Section 31 of the IB Code - scope of 'Operational creditor' and 'Operational Debt' - HELD THAT:- In the present cases, the State Government shall fall within the definition of 'operational creditor', and the taxes payable by the petitioner shall fall within the definition of 'operational debt', as defined in the IB Code - As such, there can be no doubt that the case of the petitioner shall be governed by the provisions of the IB Code. There are force in the submissions of the learned Additional Advocate General that the tax amount, which had been sought to be realised from the petitioner Company, had already been realised by the petitioner Company from the customers which was to be deposited in the Government Exchequer, but that having not been done by the Company and the amount having been utilized for its business purposes, throughout after the years 2011-12 and onwards, shall certainly amount to criminal misappropriation of the Government money by the Company, and the State Government is entitled to realize the same with the penalty due thereon. It is also found that the re-assessment orders were passed on 17.08.2018 as contained in Annexure-3 to the writ applications, by which date the resolution plan was already approved by the NCLT on 17.04.2018, but the same was never brought to the knowledge of the Commercial Tax officials by the Company, even though the petitioner Company was given a hearing by the Assessing Authority, i.e., respondent No. 4 Assistant Commissioner of State Tax, Bokaro Circle, Bokaro, before passing the re-assessment orders - also, the notice under Section 13 of the IBC Code was never published in the State of Jharkhand, rather the notice was published only in the Business Standard of Kolkata Edition on 24.07.2017 as contained in Annexure-7 to the supplementary affidavit. There is no denial to the fact that such notice was never published in the State of Jharkhand. A conjoint reading of Section 13(1)(b) of the IB Code read with Regulation 6 aforesaid, clearly shows that the public announcement had to be made in the newspapers with wide circulation at the location of the registered office and principal office, of the petitioner Company. Admittedly, the registered office of the petitioner Company is at Ranchi, and its principal place of business is in the District of Bokaro, both of which are situated in the State of Jharkhand, but no public announcement of the corporate insolvency resolution process was made in the State of Jharkhand - since the resolution plan is approved by the NCLT, and not interfered with even by the Hon'ble Apex Court as pointed out above, we are not required to look into the legality or otherwise of the resolution process, but the fact remains that due to non publication of the public announcement of the corporate insolvency resolution process in the State of Jharkhand, the authorities of the Commercial Taxes Department had no occasion to have any knowledge about the corporate insolvency resolution process of the Company, and they were deprived of making their claim before the interim resolution professional - Since the State Government was not involved in the resolution process, the resolution plan cannot be said to be binding on the State Government under Section 31 of the IB Code. We are not inclined to entertain these writ applications, even though there is a resolution plan in favour of the petitioner Company, approved by the Adjudicating Authority, i.e., the NCLT, for the simple reason that it was never brought to the knowledge of the Commercial Tax authorities of the State of Jharkhand that the corporate insolvency resolution process had been initiated against the petitioner Company, and no public announcement of the corporate insolvency resolution process was made in the State of Jharkhand - Admittedly, the State Government was never involved in the corporate insolvency resolution process, and as such, the resolution plan cannot be said to be binding on it. Petition dismissed.
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