Case Law Details
Associate Décor Limited Vs Deputy Commissioner of Commercial Taxes (Karnataka High Court)
A petitioner has filed a petition seeking various reliefs, including the quashing of several notices and proceedings initiated by the respondent under the K GST Act, C GST Act, and I GST Act. The petitioner argues that these proceedings are in violation of the moratorium declared by the National Company Law Tribunal (NCLT) during the corporate insolvency resolution process (CIRP) against the petitioner. The petitioner asserts that all proceedings against them should be stayed until the moratorium is lifted. The respondent argues that certain assessment/adjudication proceedings can continue during the moratorium and that dismissing the petition would prevent them from being time-barred after the moratorium is lifted. The court is considering the arguments presented by both parties.
Analysis: The petitioner in this case is seeking relief from various notices and proceedings initiated by the respondent, arguing that they are in violation of the moratorium declared by the NCLT during the CIRP. The petitioner’s counsel relies on relevant provisions of the Insolvency and Bankruptcy Code, 2016 (IBC), particularly Section 14, which imposes a complete embargo on initiating or continuing proceedings against the corporate debtor during the moratorium.
The petitioner argues that the respondent’s proceedings, including notices, audits, show cause notices, and assessments, fall within the scope of Section 14 and should be suspended until the CIRP is completed and the moratorium is lifted. They contend that the wording of Section 14, which refers to “proceedings” and “other authority,” encompasses the actions taken by the respondent.
In support of their argument, the petitioner’s counsel cites relevant legal precedents, including the Ghanashyam Mishra & Sons Private Limited vs. Edelweiss Assets Reconstruction Company Limited case and Mohan Raj and others vs. Shah Brothers ‘spat Private Limited case, which uphold the applicability of Section 14 to proceedings initiated by government departments and tax authorities during the moratorium.
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