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TMI Blog2024 (8) TMI 563X X X X Extracts X X X X X X X X Extracts X X X X ..... d dispose of the various objections which had been furnished by the writ petitioner before proceeding to commence the reassessment exercise. 3. The primary ground on which the action of reassessment is assailed is the approval of a Resolution Plan under the statutory regime constructed in terms of the Insolvency and Bankruptcy Code, 2016 [IBC] and the statutory injunct which would operate in respect of any claim which may pertain to a period prior to the Resolution Plan being approved. 4. It is in the aforesaid context that Ms. Jha, learned counsel appearing for the writ petitioner, contended that the challenge is liable to be accepted bearing in mind the decisions handed down by this Court in M Tech Developers Pvt. Ltd. v. National Faceless Assessment Centre and Anr. 2024 SCC OnLine Del 2276, Sree Metaliks Limited v. Additional Director General and Ors. 2023 SCC OnLine Del 941 and Rishi Ganga Power Corporation Ltd. v. Assistant Commissioner of Income-tax 2023 SCC OnLine Del 6994. 5. According to Ms. Jha, the issue which stands raised is no longer res integra bearing in mind the judgments rendered by the Supreme Court in the context of Section 31 of the IBC and the law enunciate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn of Income online and to furnish all the documents and the information sought in the aforementioned notices. The petitioner additionally appears to have taken various preliminary objections to the proposed reassessment as would be evident from its communications dated 13 October 2021 and 20 December 2021. 10. The writ petitioner, as stated in the preceding paragraphs, thereafter approached this Court by way of W.P.(C)2053/2022 and which came to be disposed of on terms noticed hereinabove. The various objections which were taken by the petitioners came to be negated by way of the impugned order dated 17 February 2022. 11. As would be evident from a perusal of the aforesaid order, post the disposal of the first writ petition, the respondents appear to have sought legal opinion on the question whether reassessment action could be initiated notwithstanding the Resolution Plan having been approved by the NCLT. 12. The legal opinion which has been copiously reproduced in the impugned order firstly takes note of the provisions of the IBC and the various Regulations framed thereunder to opine that the Department is liable to be recognized as an operational creditor in terms of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d counsel in this connection drew our attention to the following observations as appearing in M Tech Developers:- "7. We note that while dealing with an identical issue, we had in Ireo Fiveriver Pvt. Ltd. v. Income-tax Department (W.P. (C) No. 12461 of 2022 dated 5-3-2024 (Delhi)) recognized the legal position to be as under: "3. It is in the aforesaid backdrop that we take note of the judgment rendered by the Supreme Court in Ghanashyam Mishra and Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. wherein the following principles came to be laid down (page 306 of 227 Comp Cas): "93. As discussed hereinabove, one of the principal objects of the Insolvency and Bankruptcy Code is providing for revival of the corporate debtor and to make it a going concern. The Insolvency and Bankruptcy Code is a complete code in itself. Upon admission of petition under section 7 there are various important duties and functions entrusted to resolution professional and committee of creditors. The resolution professional is required to issue a publication inviting claims from all the stakeholders. He is required to collate the said information and submit necessary details in the information ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eason that this provision ensures that the successful resolution applicant starts running the business of the corporate debtor on a fresh slate as it were. In SBI v. V. Ramakrishnan, this court relying upon section 31 of the Code has held (page 380 of 210 Comp Cas): "25. Section 31 of the Act was also strongly relied upon by the respondents. This section only states that once a resolution plan, as approved by the committee of creditors, takes effect, it shall be binding on the corporate debtor as well as the guarantor. This is for the reason that otherwise, under section 133 of the Contract Act, 1872, any change made to the debt owed by the corporate debtor, without the surety's consent, would relieve the guarantor from payment. Section 31 (1), infact, makes it clear that the guarantor cannot escape payment as the resolution plan, which has been approved, may well include provisions as to payments to be made by such guarantor. This is perhaps the reason that annexure VI(e) to form 6 contained in the Rules and regulation 36(2) referred to above, require information as to personal guarantees that have been given in relation to the debts of the corporate debtor. Far from support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y pertain to a period prior to the resolution plan itself having been approved." 15. According to Ms. Jha, our Court in Sree Metaliks had come to a similar conclusion as would be apparent from the following observations rendered in that judgment:- "71. This is a case, where despite knowledge, the statutory authorities chose not to submit their proof of claim. Mr. Sharma's argument, that since it was known to SML that amounts were due, proof of claim [under the unamended Regulation i.e., Regulation 12] was not required to be filed, is difficult to accept, because if this argument were to be sustained, then whatever the assessee [in this case SML] were to state before the RP would have to be taken as the gospel truth. In a given case, the assessee could state, that nothing was due to the concerned creditor. In our view, once a Public Announcement was made, it was incumbent upon all creditors, which included the statutory creditors, to submit the proof of claim. 72. Therefore, the fact that extensions were sought to fulfil export obligations would not help the cause of the respondents. As a matter of fact, respondent nos. 2, 3 and 7 have, in their counter-affidavit, admitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Asset Reconstruction Company Ltd.) through the director. 27. Since the Revenue failed lodge its claims, the impugned demands raised by the Revenue stand automatically extinguished. (See Ruchi Soya Industries Ltd. v. Union of India and Sree Metaliks Ltd. v. Additional Director General (at para 53))." 17. Appearing for the respondents, Mr. Maratha, learned counsel submitted that the Department was clearly constrained from submitting any claims in the course of the CIRP since at that time assessment proceedings were yet to be concluded. According to learned counsel, the claim of the respondents cannot be brushed aside or ignored merely because a Resolution Plan has come to be approved under the IBC. 18. Mr. Maratha sought to draw support for the aforenoted submissions by drawing our attention to the following passages forming part of the judgment of the Supreme Court in State Tax Officer v. Rainbow Papers Ltd. (2023) 9 SCC 545:- "41. Section 31 IBC which provides for approval of a resolution plan by the adjudicating authority makes it clear that the adjudicating authority can approve the resolution plan only upon satisfaction that the resolution plan, as approved by the Commit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In other words, if a company is unable to pay its debts, which should include its statutory dues to the Government and/or other authorities and there is no plan which contemplates dissipation of those debts in a phased manner, uniform proportional reduction, the company would necessarily have to be liquidated and its assets sold and distributed in the manner stipulated in Section 53 IBC." 19. Our attention was also drawn to a more recent decision handed down by the Supreme Court in Greater Noida Industrial Development Authority 2024 SCC OnLine SC 122 and where the Court while examining the scope of Sections 30 and 31 of the IBC had framed the following issues for consideration:- "39. Upon consideration of the rival submissions, following issues arise for our consideration in this appeal: (i) Whether in exercise of powers under sub-section (5) of section 60, the Adjudicating Authority (i.e., National Company Law Tribunal) can recall an order of approval passed under sub-section (1) of section 31 of the Insolvency and Bankruptcy Code ? (ii) Whether the application for recall of the order was barred by time? (iii) Whether the resolution plan put forth by the resolution appli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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