Case Law Details
Principal Commissioner of Customs Vs Rajendra Prasad Tak ETC. (Supreme Court of India)
Introduction: In a landmark decision, the Hon’ble Supreme Court, in the case of Principal Commissioner of Customs v. Rajendra Prasad Tak & Ors, dated October 30, 2023, emphasized the primacy of the waterfall mechanism under Section 53 of the Insolvency and Bankruptcy Code (IBC). This article explores the significance of this judgment, focusing on the distribution of proceeds and the specific impact on the Central Board of Indirect Taxes & Customs (CBIC) dues.
Supreme Court reinforces the primacy of the waterfall mechanism under the Insolvency and Bankruptcy Code in Section 53 of the Insolvency and Bankruptcy Code, 2016 (IBC).
Background:
The central issue in this case is the order of priority for the distribution of proceeds from the sale of liquidation assets, as stipulated in Section 53 of the IBC. This section delineates a hierarchical distribution mechanism essential for the equitable settlement of debts and obligations in an insolvency scenario.
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