GSL Nova Petrochemicals Limited Vs DCIT (Gujarat High Court)
The Gujarat High Court allowed a writ petition challenging a notice issued under Section 148 and an order passed under Section 148A(d) of the Income-tax Act, 1961 for Assessment Year 2018-19. The petitioner company had filed its income tax return for the relevant assessment year. Subsequently, a notice dated 30 March 2022 was issued proposing reassessment. However, prior to the issuance of the notice, the petitioner had undergone Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC), which was admitted by the National Company Law Tribunal (NCLT). A Resolution Plan was approved by the NCLT on 5 October 2021, and the plan specifically provided for the waiver and extinguishment of all assessed and unassessed tax liabilities relating to the period before its approval.
The petitioner contended that, upon approval of the Resolution Plan under Section 31 of the IBC, all claims not forming part of the approved Resolution Plan stood extinguished. It relied upon Supreme Court decisions in Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta and Ghanshyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd., which held that once a Resolution Plan is approved, all claims not included therein stand extinguished and no proceedings can continue in respect of such claims.
