GST Claims Barred After Resolution Plan Approval: Allahabad HC

Allahabad: In a significant ruling reinforcing the finality of resolution plans approved under the Insolvency and Bankruptcy Code (IBC), 2016, the Allahabad High Court has quashed a Goods and Services Tax (GST) assessment order and demand notice issued against a company after its Corporate Insolvency Resolution Process (CIRP) had concluded and the resolution plan was approved by the National Company Law Tribunal (NCLT). The court held that claims for periods prior to the CIRP initiation are extinguished once the resolution plan is approved, and statutory authorities cannot raise such demands subsequently.

The case involved Arena Superstructures Private Limited, which had undergone CIRP. The company’s insolvency resolution process commenced on October 10, 2020, with the appointment of a Resolution Professional (RP). As part of the standard procedure under the IBC, the RP undertook the process of inviting claims from all creditors, including statutory authorities. The petitioner specifically informed the High Court that notice regarding the CIRP proceedings and the invitation for claims was also sent to the GST Department in Noida.