CIT Vs Income Tax Settlement Commission & Anr. (Delhi High Court)
Introduction: The Delhi High Court recently closed a writ petition in the case of CIT vs. Income Tax Settlement Commission & Anr. The petitioner, the Revenue, faced rejection of its claim with the Resolution Professional (RP) amid the ongoing Corporate Insolvency Resolution Process (CIRP) before the National Company Law Tribunal (NCLT). The court’s decision was influenced by the operative moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016.
Detailed Analysis: The writ petition was presented by Mr. Gaurav Gupta, the learned senior standing counsel representing the petitioner/revenue. The claim lodged with the RP was rejected, prompting the petitioner to seek an appropriate remedy. However, the court took note of the crucial fact that respondent no. 2 was undergoing CIRP before the NCLT. Mr. Kanisk Khetan, appearing for respondent no. 2, highlighted the petitioner’s non-response to the public announcement made by the Interim Resolution Professional (IRP).
Considering the circumstances, the court observed the operative moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016. Recognizing the ongoing proceedings before the NCLT and the limited purpose served by progressing the writ petition, the court decided to close the petition. The petitioner/revenue was granted the liberty to approach the court, as per the law, for reviving the petition based on the outcome of the NCLT proceedings.
Conclusion: The Delhi High Court’s decision to close the writ petition reflects the impact of the ongoing Corporate Insolvency Resolution Process on the petitioner’s claim. The court acknowledged the operational moratorium and deemed it unproductive to pursue the writ further. The petitioner has the liberty to revive the petition based on the developments in the NCLT proceedings, highlighting the dynamic interplay between insolvency processes and legal remedies.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. Mr Gaurav Gupta, learned senior standing counsel, who appears on behalf of the petitioner/revenue, says that the claim lodged with the Resolution Professional (RP) was rejected and, therefore, the petitioner/revenue is in the process of taking recourse to an appropriate remedy.
2. The fact remains that respondent no.2 is undergoing the Corporate Insolvency Resolution Process before the National Company Law Tribunal, Delhi Bench [in short, “NCLT”].
3. We were also informed on the previous date i.e., 11.09.2023, by Mr Kanisk Khetan, learned counsel, who appears on behalf of respondent no. 2, that the petitioner/revenue did not respond to the public announcement made by the Interim Resolution Professional (IRP).
4. Whichever way we look at it, at present, what cannot be denied is the fact that the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016, is operative. Therefore, according to us, no purpose will be served in progressing the writ petition any further.
5. The writ petition is accordingly closed, with liberty to the petitioner/revenue to approach the court, if deemed appropriate, albeit as per the law, for reviving the petition, depending on the outcome of the proceedings pending before the NCLT.
6. Parties will act based on the digitally signed copy of the order
