Summary: The Delhi High Court’s decision in Jaiprakash Associates Ltd. concerned a customs short-levy demand of ₹5,89,366 arising from imports made in September 2023. Although Customs issued a show cause notice during the importer’s corporate insolvency resolution process (CIRP), it did not lodge a claim, and the approved resolution plan extinguished the demand. This article examines a separate procedural question: whether Customs could have submitted a belated claim after the request for resolution plans (RFRP) but before the committee of creditors (CoC) voted. It explains that Regulations 13(1B) and 13(1C) of the CIRP Regulations provide a route for verification, CoC consideration and adjudication of delay by the NCLT for claims received up to seven days before the voting meeting. On the dates discussed, the show cause notice was issued on 10 September 2025, the voting meeting was scheduled for 7 November 2025, and the stated cut-off was 31 October 2025. The article distinguishes permissible assessment or quantification of customs dues during the moratorium from prohibited recovery, addresses contrary appellate decisions on assessments made during moratorium, and considers judicial approaches to condonation. Its central argument is that Customs should promptly lodge a quantified, disputed pre-CIRP claim rather than await an order-in-original. This is an editorial argument about a potentially available procedure, not a holding that late claims must invariably be admitted.
Introduction
The Delhi High Court’s decision in Jaiprakash Associates Ltd. v. Office of the Commissioner of Customs (Air Cargo Complex Import) (“Jaiprakash”) quashed a customs demand against a company that had been through insolvency. Customs alleged a short levy of ₹5,89,366 on goods imported in September 2023. It issued its show cause notice (“SCN”) on 10 September 2025, while the corporate insolvency resolution process (“CIRP”) of the importer was still underway. Customs never filed a claim, and the Court held that the approved resolution plan extinguished the demand.
The outcome is unsurprising. It is settled that claims not forming part of an approved plan, including statutory dues, stand extinguished. The more useful part of Jaiprakash is its holding that the customs claim existed from the date of import, and that the SCN merely quantified it. The judgment raises, but does not work through, a further question: what should a revenue authority do when it quantifies a pre-insolvency liability in the middle of a CIRP?
The following post argues that Customs lost its claim in Jaiprakash because it failed to use a route already provided by law. Since the SCN merely quantified a claim that existed from the date of import, any claim Customs filed would have been an existing claim filed late. Regulations 13(1B) and 13(1C) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”) permit a belated claim to be lodged up to seven days before the committee of creditors (“CoC”) meets to vote on the plan, and leave the question of condonation to the National Company Law Tribunal (“NCLT”).
A revenue authority that files the amount in its SCN promptly, and before this cut-off, should therefore have its delay condoned. In Jaiprakash, Customs had about seven weeks to do so and did nothing.
A Claim That Existed Before It Was Quantified
The Insolvency and Bankruptcy Code, 2016 (“IBC”) defines a claim as a right to payment, ‘whether or not such right is reduced to judgment, fixed, disputed, undisputed’. Relying on this definition, the Court in Jaiprakash held that the existence of a claim is referable to the underlying right to payment, not to its later adjudication or quantification. It further observed that the SCN ‘could not create a new liability for purposes of the IBC’. The customs liability was therefore a pre-CIRP claim from the moment the goods were cleared.
This is consistent with the Customs Act, 1962. The importer self-assesses, and under Section 28, the proper officer may serve a notice for short-paid duty within two years from the ‘relevant date’, which is the date of the order for clearance. The insolvency does not pause this period. In Jaiprakash, the goods were cleared in mid-September 2023, and the SCN was issued at the very end of the two years.
Further, the moratorium does not bar Customs from acting. The Supreme Court in Sundaresh Bhatt v. Central Board of Indirect Taxes & Customs held that during the moratorium, Customs has limited jurisdiction to assess or determine the quantum of duty, but cannot initiate recovery. Determination is permitted, but the enforcement of the claim so determined is not. The SCN in Jaiprakash was, therefore, lawful. What Customs failed to do was take the next step.
Two Windows for Late Claims, Not One
The CIRP Regulations, as amended in 2023, provide two distinct windows for creditors who miss the date in the public announcement. Under Regulation 12(1), a creditor may file as of right up to the date the request for resolution plans (“RFRP”) is issued or ninety days from the insolvency commencement date, whichever is later. It must give reasons for any delay beyond ninety days. After that date, Regulation 12 is silent.
Regulations 13(1B) and 13(1C) govern what follows. Claims received after the Regulation 12 period and up to seven days before the CoC meeting for voting on the plan must be verified by the resolution professional and categorised as acceptable or non-acceptable. Acceptable claims go to the CoC for its recommendation and to the NCLT for condonation of delay, which the resolution professional cannot grant himself. The Insolvency and Bankruptcy Board of India recently took disciplinary action against a professional for admitting a post-RFRP claim without placing it before the CoC and the NCLT.
The cut-off is hence strict. In Suman Chopra v. Arvind Kumar (“Suman Chopra”), the NCLAT upheld the rejection of a claim filed four days before the voting meeting, holding that the resolution professional can accept claims only up to seven days before it. At the other end, the Supreme Court in RPS Infrastructure Ltd. v. Mukul Kumar (“RPS Infrastructure”) refused a claim filed after the CoC had approved the plan, since the resolution applicant would otherwise face ‘undecided’ claims that the plan never priced. The space between the RFRP and seven days before the vote, however, is open.
Tribunals have recognised this. NCLT Mumbai dismissed an income tax claim filed after the CoC vote, and expressly contrasted it with ‘a situation where the CoC is yet to vote upon the resolution plan, and Regulation 13 continues to permit verification of belated claims’. Notably, the NCLT Amaravati has condoned the delay in a State Tax claim filed after the RFRP, once the CoC had recommended its inclusion under Regulation 13(1C). The route, hence, is not hypothetical.
Applying the Window to the Facts in Jaiprakash
The NCLT order approving the plan records that the RFRP was issued on 24 April 2025, and that the plan was put to a vote at the CoC meeting of 7 November 2025. The Regulation 13(1B) cut-off was therefore 31 October 2025, about seven weeks after the SCN. Customs filed nothing. The High Court gives 31 October 2025 as the approval date; this post follows the NCLT’s record.
Customs cannot plead ignorance. The Court in Jaiprakash held that the public announcement was sufficient notice and that the responsibility of filing a claim lies on the creditor. The NCLAT in Suman Chopra took the same view. Customs knew enough to issue an SCN against a company in CIRP. It could equally have filed a claim.
The Moratorium Objection
The strongest objection to this route comes from a line of NCLAT decisions holding that no claim based on an assessment made during the moratorium can be pressed in the CIRP. The NCLAT applied this rule to reject a provident fund claim filed before the CoC approved the plan, because the underlying inspection and assessment were themselves barred by Section 14. If an SCN issued during the CIRP falls within this rule, the belated-claim window is of no help to Customs.
However, this objection does not settle the matter. Firstly, the NCLAT has, in a liquidation, held that a tax authority could determine dues during the moratorium but could not enforce them, and that claims arising from such assessments were rightly admitted as unsecured operational debt. The Supreme Court refused to interfere with this holding.
Secondly, Jaiprakash treats the SCN as quantifying a liability that already existed. A claim lodged on the SCN amount is a claim for the pre-CIRP duty, and the SCN only supplies its figure.
The Revenue should, therefore, not wait for an order-in-original, which may arrive after the voting meeting. It should lodge the SCN amount as a disputed claim and leave the NCLT to decide on condonation and value.
What Should Condonation Turn On?
The Regulations do not say what justifies condonation. The Supreme Court in RPS Infrastructure considered the length of the delay, the creditor’s commercial character, and whether it had been vigilant. Earlier, and on similar reasoning, the NCLT Chennai refused a customs claim filed 217 days late, which was unquantified, unexplained, and brought ‘at this fag end of CIRP’. That decision shows the limits of the route. It does not close it.
A workable standard for statutory claims follows from these cases. The Revenue should show when it first had reason to believe that duty had been short-paid, file the SCN amount promptly after the notice is issued, and do so before the Regulation 13(1B) cut-off. A Revenue that sat on a known short levy would fail this test. One that files within days of its notice, while bidders can still be told of the claim, should not.
It may be said that such claims are rarely worth pursuing, since government dues rank low. In ITO v. Solar Voltaic, the NCLAT noted that the income tax department received more under the plan than it would have if its late claim had been admitted. Yet the choice before the Revenue is between a low-ranked claim and an extinguished one, followed by litigation it is bound to lose.
Concluding Remarks
Jaiprakash correctly holds that an unfiled customs claim does not survive an approved resolution plan. Its more useful finding is that the claim existed before the SCN quantified it. Read with Regulations 13(1B) and 13(1C), that finding tells the Revenue to lodge the SCN amount before the voting cut-off.
Two changes would make this more reliable. The CBIC instruction on insolvency cases only asks officers to file within ninety days of commencement. It should also require a claim to be lodged as soon as an SCN is issued against a company in CIRP. Separately, the Insolvency and Bankruptcy Board’s February 2026 proposal to place every acceptable belated claim before the NCLT, regardless of the CoC’s recommendation, should be adopted, so that condonation is decided by the Tribunal, where the Regulations place it.
