Cosmos CO. OP. Bank Ltd Vs Kailash T. Shah (NCLAT Delhi)
NCLAT Delhi held that direction to resolution professional to release the amount to Gujarat State Tax Department treating it as secured creditor under Section 48 of the Gujarat Value Added Tax Act, 2003 is justifiable as NCLT is obliged to apply decision of Supreme Court.
Facts- The present appeal has been filed under Section 61 of the Insolvency and Bankruptcy Code, 2016 by The Cosmos Co-operative Bank Ltd., the sole Financial Creditor and member of the Committee of Creditors of Sterling Lam Limited (the Corporate Debtor). The appeal arises out of the impugned order dated 22.02.2024 passed by the National Company Law Tribunal, Ahmedabad Bench, whereby the Adjudicating Authority directed Shri Kailash T. Shah, Resolution Professional/ Respondent No. 1 to release an amount of Rs. 1,31,19,769.08 in favour of the Gujarat State Tax Department/ Respondent No.3 treating it as a secured creditor under Section 48 of the Gujarat Value Added Tax Act, 2003.
Conclusion- Held that Section 48 of the GVAT Act clearly provides that any amount payable by a dealer on account of tax, interest, or penalty “shall be a first charge on the property” of such dealer, notwithstanding anything contained in any other law. This provision automatically creates a charge by operation of law, meaning that it does not depend on any agreement between parties, but arises the moment tax liability crystallizes through assessment.
