Department of State Tax Vs Zicom Saas Pvt. Ltd. & Anr. (NCLAT Delhi)
The National Company Law Appellate Tribunal (NCLAT), Delhi, dismissed an appeal filed by the Department of State Tax challenging the order dated 16.12.2021 of the National Company Law Tribunal, Mumbai Bench, approving the resolution plan submitted during the Corporate Insolvency Resolution Process (CIRP).
The appellant submitted that it had filed a claim of ₹43,72,97,479 before the Resolution Professional, out of which ₹36,68,12,729 was admitted. Under the approved resolution plan, however, it was allocated only 1% of its admitted claim. The appellant contended that its claim ought to have been treated as a secured claim in light of the Supreme Court’s judgment in State Tax Officer Vs. Rainbow Papers Limited [2022 SCC OnLine SC 1161] and relied upon Section 37 of the Maharashtra Value Added Tax Act, 2002.
The respondent submitted that a review petition against the Supreme Court’s decision in Rainbow Papers Limited had been filed and notice had been issued by the Supreme Court on 02.02.2023. It was also contended that the decision in Rainbow Papers Limited was distinguishable from the facts of the present case.
The NCLAT observed that there was no dispute regarding the CIRP process or the amount of the admitted claim. It compared Section 48 of the Gujarat Value Added Tax Act, which had been considered in Rainbow Papers Limited, with Section 37 of the Maharashtra Value Added Tax Act, 2002. The Tribunal noted that while Section 48 of the GVAT Act provides for a first charge on the property of the dealer, Section 37 of the MVAT Act expressly states that such first charge is “subject to any provision regarding creation of first charge in any Central Act for the time being in force.”
