IBC, 2016 would prevail over Customs Act, 1962: SC

By Editor Corporate Law Featured , Judiciary August 27, 2022

TaxGuru Citation: 2022 taxguru.in 3906
Case Name: Sundaresh Bhatt, Liquidator of ABG Shipyard Vs Central Board of Indirect Taxes and Customs (Supreme Court)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Courts: Supreme Court of India

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Sundaresh Bhatt, Liquidator of ABG Shipyard Vs Central Board of Indirect Taxes and Customs (Supreme Court)

Judgment dated 26^th August, 2022 of the Hon’ble SC in the matter Sundaresh Bhatt, Liquidator of ABG Shipyard Vs. Central Board of Indirect Taxes and Customs [Civil Appeal No. 7667 of 2021].

The Hon’ble Supreme Court vide its order dated 26^th August, 2022 held that the Insolvency and Bankruptcy Code, 2016 (the Code), would prevail over the Customs Act, and once moratorium is imposed in terms of sections 14 or 33(5) of the Code, the customs authority only has a limited jurisdiction to assess/determine the quantum of customs duty and other levies. The Hon’ble SC made some important findings and observations as under:

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Ruling

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Stages of CIRP

(a) Upon admission of an application by the NCLT, the claims of the creditor will be frozen for 180 days, during which time, the NCLT will hear proposals for revival of the CD and decide on future course of action.

(b) During this period, a moratorium is imposed to ensure no coercive proceedings are launched or continued against the CD in any other forum or under any other law, until approval of the resolution plan or initiation of the liquidation process.