State Tax Officer Vs Nitin Narang (NCLAT Delhi)
NCLAT Delhi held that provisions of section 9(2) of the CST Act doesn’t create statutory charge on the assets of the Corporate Debtor. Thus, unpaid CST dues are unsecured debt. Accordingly, appeal is dismissed and order of Adjudicating Authority upheld.
Facts- The Corporate Debtor– M/s Afcan Impex Pvt. Ltd. was admitted to Corporate Insolvency Resolution Process by order dated 17.02.2021 based on an application filed by Bank of Maharashtra u/s. 7 of the Insolvency and Bankruptcy Code, 2016. The RP issued public announcement on 23.02.2021 inviting the claims. The Appellant – State Tax Officer filed its claim in Form-B on 19.04.2021, which was provisionally accepted by the RP.
In the Resolution Plan, the State Tax Officer was not considered as secured creditor. The assets of the CD were attached by the State Tax Department, for which the RP filed an application for removing the attachment. An order was passed on 06.12.2024 by the Adjudicating Authority directing removal of attachment.
The Appellant filed an application praying for a direction that claim of the Appellant be considered as secured creditor and RP be directed to consider and accept the whole claim of Applicant being Rs.5,80,64,381/- under the Gujarat Value Added Tax Act, 2003 and under the Central Sales Tax Act, 1956 as secured creditor.
