Case Law Details
Radiant Castings Private Limited Vs Joint Commissioner of State Taxes & Excise (Himachal Pradesh High court)
The Himachal Pradesh High Court allowed the petition filed by Radiant Castings Private Limited seeking quashing of notice dated 22.08.2022 issued by the Joint Commissioner of State Taxes & Excise, South Enforcement Zone, Parwanoo, and challenging the blocking of Input Tax Credit (ITC) amounting to Rs. 4,27,11,970/-. The petitioner also sought restraint against further coercive action relating to a demand claimed to have been extinguished after completion of the Corporate Insolvency Resolution Process (CIRP).
The Court noted that the National Company Law Tribunal (NCLT), New Delhi, had approved the Resolution Plan on 30.08.2023 under Section 30(6) read with Section 31 of the Insolvency and Bankruptcy Code, 2016, in respect of the corporate debtor. The Resolution Plan submitted by the Successful Resolution Applicant, M/s Scope Dealtrade Private Limited, was accepted.
During the CIRP proceedings, the State failed to submit its claim before the NCLT. Consequently, the State’s claim was neither adjudicated nor allowed by the NCLT. Thereafter, the respondent-State filed an application seeking recall of the NCLT order, which was dismissed on 20.02.2025.
The State subsequently challenged the dismissal before the National Company Law Appellate Tribunal (NCLAT) through Company Appeal (AT) (Insolvency) No. 684 of 2025. The NCLAT dismissed the appeal on 09.07.2025. The State then filed Civil Appeal No. 11330 of 2025 before the Supreme Court, which was also dismissed on 23.09.2025, with the Court observing that no ground existed to interfere with the NCLAT order.
In view of these developments, the High Court held that the respondents were not competent or entitled to continue blocking the petitioner’s ITC or proceed further on the basis of the impugned notice dated 22.08.2022. Accordingly, the notice was quashed and the respondents were directed to unblock the ITC and release the amount admissible under law, preferably within two months.
The Court clarified that the order would not prevent the State from taking any action permissible under law for recovery of any due amount, if applicable.
FULL TEXT OF THE JUDGMENT/ORDER OF HIMACHAL PRADESH HIGH COURT
Petitioner has approached this Court for quashing and setting aside impugned notice dated 22.08.2022 (Annexure P-1) issued by Joint Commissioner of State Taxes & Excise, South Enforcement Zone, Parwanoo and also, against blocking the Input Tax Credit (‘ITC’) of the petitioner amounting to Rs.4,27,11,970/- with further prayer to restrain the respondents from taking any further punitive or coercive action on the basis of demand, which has already been extinguished after conclusion of Corporate Insolvency Resolution Process (‘CIRP’) of the petitioner.
2. Admittedly, vide order dated 30.08.2023, National Company Law Tribunal (‘NCLT’), New Delhi, had approved Resolution Plan placed before it under provisions of Section 30(6) read with Section 31 of Insolvency and Bankruptcy Code, 2016 read with Regulation 39(4) of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, in respect of Corporate Debtor, M/s Radiant Castings Private Limited, submitted by Successful Resolution Applicant (‘SRA’), namely M/s Scope Dealtrade Private Limited.
3. At the time of adjudication of aforesaid proceedings, the State failed to put forth its claim before the NCLT, New Delhi, and accordingly, the claim of the State was neither adjudicated by the NCLT, New Delhi, nor it was allowed.
4. Respondent-State had preferred an application to recall the aforesaid order passed by the NCLT, New Delhi, which was dismissed on 20.02.2025.
5. The aforesaid order was assailed by the State before National Company Law Appellate Tribunal (‘NCLAT’) by filing Company Appeal (AT) (Insolvency) No.684 of 2025 titled ‘Joint Commissioner of State Taxes & Excise (SEZ) Parwanoo, Himachal Pradesh vs. M/s Radiant Castings Private Limited & Anr.’ The said appeal was dismissed by NCLAT on 09.07.2025.
6. The aforesaid dismissal of application and appeal was assailed by the respondent-State in Civil Appeal No.11330 of 2025 titled ‘Joint Commissioner of State Taxes & Excise (SEZ) Parwanoo, Himachal Pradesh vs. M/s Radiant Castings Private Limited & Anr.,’ which was dismissed on 23.09.2025 with observation that no ground was found to interfere with the impugned order dated 09.07.2025 passed by NCLAT, New Delhi.
7. Admittedly, in view of above dismissal and the appeals preferred by the respondent-State, the respondents are not competent and entitled to block the ITC of the petitioner and to proceed in furtherance of impugned notice dated 22.08.2022.
8. Accordingly, impugned notice dated 22.08.2022 (Annexure P-1) is quashed, and respondents are directed to unblock the ITC of the petitioner and to release the amount accordingly, as admissible under law, as expeditiously as possible, preferably within two months.
9. Needless to say, passing of aforesaid order shall not inhibit the State from taking any action, as available under law, for recovery of due amount, if any.
10. Present petition is allowed and stands disposed of in aforesaid terms. Pending miscellaneous application(s), if any, also stands disposed of.
Note:
1 Whether the reporters of the local papers may be allowed to see the Judgment? Yes
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