TMI Blog2019 (12) TMI 1326X X X X Extracts X X X X X X X X Extracts X X X X ..... ditor'. The operational debt is a claim in respect of the provision of goods or services. If any amount is payable in respect of goods, then it becomes an 'operational debt'. Here the petitioner is claiming that it has paid TDS to the statutory-authorities without deducting the same from the invoices. Firstly, the petitioner is not supplier of goods. The petitioner is only a purchaser. Secondly, no amount is due in respect of the amount payable for purchase of material. The corporate debtor is the supplier - Admittedly, it is not the case of rendering any services to the corporate debtor. Amount paid towards TDS cannot be held to be an 'operational debt'. If the petitioner has paid TDS to the statutory authorities, naturally the petitioner is entitled for refund from the corporate debtor. The petitioner has to initiate separate action against the corporate debtor for recovery of the same by filing a civil suit or taking appropriate action available under the law. As far as I B Code is concerned the claim must be in respect of provision of goods or services or other liabilities stated thereunder in section 5(21) of the I B Code. We are unable to agree with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Financial year 2011- 21012 amounting to ₹ 59,30,408/- plus TDS for the Financial Year 2012-2013 amounting to ₹ 1,25,02,064/-) which was payable to the statutory authorities. Thus, amount of ₹ 1,84,32,472/- which was payable to the statutory authorities was paid to the Respondent. C. Thereafter, the Petitioner made additional payments to the tune of ₹ 1,84,32,472/- to the statutory authorities being the amount of TDS payable on the transactions with the Respondent. The Respondent availed credit of the TDS amount which was so paid from the statutory authorities. In effect, the Respondent received additional amount in excess of what it was entitled to, once when the said amount was paid to them by the Petitioner and the second time when the Respondent availed credit of the same amount from the Statutory Authorities. D. The Petitioner thus sought refund of the additional amount of ₹ 1,84,32,472/- which was paid to the tax authorities on behald of Respondent. However, the Respondent failed to refund the said amount. E. The Petitioner thereafter regularly followed up with the Respondent regarding the refund of the TDS amount paid and several ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .04.2019 which is 11 days after receiving the notice. L. It is averred that in reply notice though Respondent have denied that they are liable to pay any amount to the Petitioner, but through email dated 29.06.2017 they have agreed to pay. 3. The breif averments in the Counter are as follows: i. It is averred that the present Application ex-facie is not maintainable as the Petitioner is neither an Operational Creditor as per the code nor there is any debt that is due to be paid to the Petitioner by the Respondent. The present Application is devoid of any merit or reason and deserves to be dismissed in limine. ii. It is stated that there is no Debt as defined under the provision of Section 3(11) of the code, to even attract its applicability. A debt under Section 3(11) of the code is defined as A liability or obligation is respect of a claim which is due from any person and includes a financial debt and operational debt'. Thus, the sums allegedly being sought by the Petitioner do not fall under the said definition as provided by the Code and hence, the Application is no maintainable. iii. It is stated that an application under the Section 9 of the code can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vii. It is stated when the Petitioner had issued the demand notice, the Respondent apart from disputing the contents of the same and questioning the same, also clearly stated that there exists a 'bona fide dispute' between the Parties and as such inter- alia, no sums are due or payable to the Petitioner. It is also stated that over the years, the Respondent has various dealings with the Petitioner and its other affiliates/ associates namely, Aadinath Global Private Limited, Aadinath Gems and Jewellers Private Limited, Betul Oil Limited. The Respondent sold and supplied various agricultural products under various transactions to the said Companies and at all times treated the said companies as one composite trading party. The Respondent supplied to the said Companies various agricultural products under purchase orders, under the composite understanding and arrangements, due to which the said companies owe large sums of money to the Respondent, which has not been cleared till date. viii. It is stated that on issuance of the demand notice by the Petitioner, the Respondent had disputed the contents of the same and denied the existence of any debt. Inter- alia, in the reply n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods purchased by the operational creditor from the corporate debtor and the entire transaction is in respect of sale, purchase and supply of goods and the claim is arising in connection with supply of material and as such it is an operational debt. 6. The learned counsel relied on e-mail message received from the corporate debtor on 29.06.2017, whereunder the corporate debtor admitted the liability, which is shown at page 108 of Paper Booklet and the corporate debtor undertakes to pay interest also on the amount outstanding. The learned counsel contended that the decisions relied on by the corporate debtor are on a different issue than the issue involved in the present petition. Whereas, in the present case there was supply of goods by the corporate debtor to the operational creditor. In that connection invoices were raised and the same is not an advance. 7. Thus, the learned counsel contended that the decisions cited deal with the issue of money given as an advance to the corporate debtor, which does not come within the definition of 'operational debt'. The learned counsel contended that the settlement proposal initiated at the instance of the corporate debtor with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e counsel also contended that it was the corporate debtor who supplied goods to the operational creditor and that the corporate debtor has received sale consideration for the goods supplied. Therefore, there is no operational debt due to the petitioner. Thus, the main contention of the counsel for the corporate debtor is that there is no operational debt and as such the petition is liable to be rejected. 10. After hearing the counsels for both the sides the question falls for consideration is whether the petitioner is 'an operational creditor' and the amount claimed by the petitioner is 'an operational debt'. To decide the same it is necessary to refer to various definitions contained in the I B Code. 11. To decide whether the amount paid by the petitioner towards TDS to the statutory authorities is 'an operational debt', the Tribunal has to look into section 3(6) of the I B Code, which deals with the definition of 'claim', because the claim is a part of the definition of 'debt' as contained in section 3(11) of the I B Code. Section 3(6) of the I B Code deals with the 'claim', which reads as under: 3(6) 'Claim' me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e invoices. Firstly, the petitioner is not supplier of goods. The petitioner is only a purchaser. Secondly, no amount is due in respect of the amount payable for purchase of material. The corporate debtor is the supplier. The petitioner being purchaser is said to have paid to the statutory authorities the TDS on the transaction with the corporate debtor. Whatever amount paid by the petitioner to the statutory authorities is in respect of the tax and not in respect of value of goods or services rendered to the corporate debtor. Admittedly, it is not the case of rendering any services to the corporate debtor. Amount paid towards TDS cannot be held to be an 'operational debt'. If the petitioner has paid TDS to the statutory authorities, naturally the petitioner is entitled for refund from the corporate debtor. The petitioner has to initiate separate action against the corporate debtor for recovery of the same by filing a civil suit or taking appropriate action available under the law. 15. As far as I B Code is concerned the claim must be in respect of provision of goods or services or other liabilities stated thereunder in section 5(21) of the I B Code. We are unable to agr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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