Commercial Tax Department Vs Shailendra Ajmera & Anr. (Supreme Court of India)
The matter arose from an appeal filed by the Commercial Tax Department (CTD) challenging the approval of a resolution plan by the National Company Law Tribunal (NCLT), Mumbai Bench, under Section 30(6) of the Insolvency and Bankruptcy Code, 2016 (IBC). The CTD contended that its statutory dues under Section 33 of the MPVAT Act, 2002 created a first charge on the assets of the corporate debtor, and therefore it should have been treated as a secured creditor rather than an operational creditor in the resolution plan.
Read NCLAT Delhi Judgment in this case: Tax Dues Not Secured Debt Under IBC – VAT First Charge Claim Rejected as IBC Prevails Over VAT Law
The National Company Law Appellate Tribunal (NCLAT) examined the issue and noted that there was no dispute on facts. The central question was whether statutory tax dues, by virtue of Section 33 of the MPVAT Act, could elevate the CTD to the status of a secured creditor. The Tribunal referred to earlier judgments, including its own decision in a similar case, where such claims had been rejected. It analyzed Section 33 of the MPVAT Act, which provides that tax dues shall be a first charge on the property of the dealer, subject to provisions of the Companies Act.
