Aarem Insights Pvt. Ltd. Vs Joint Commissioner of State Tax (Appeals) (Bombay High Court)
Summary: Bombay High Court allowed the writ petition concerning Assessment Year 2016-17 and set aside the appellate order dated 31.05.2023 which had confirmed an MVAT demand against the petitioner, formerly known as Shop CJ Network Pvt. Ltd. The original assessment dated 26.02.2021 under Section 23(2) of the Maharashtra Value Added Tax Act, 2002 had resulted in a demand of Rs.6,20,63,981/-,
against which the petitioner had deposited Rs.31,99,174/- as statutory pre-deposit under Section 26(6A)(c). During pendency of the appeal, the petitioner underwent CIRP under the Insolvency and Bankruptcy Code, 2016. The Resolution Plan dated 15.09.2022 was approved by NCLT on 21.03.2023 on a “clean slate” basis and subsequently rectified on 18.04.2023, providing Rs.1 crore proportionately towards full satisfaction of disputed government dues. Rs.58,58,444/- was paid to the State Tax Department towards full and final settlement of claims aggregating Rs.27,91,64,187/-.
Despite being informed of the approved Resolution Plan, the First Appellate Authority confirmed the assessment and directed recovery of the remaining tax. Relying principally upon Ghanashyam Mishra and Sons Private Limited vs. Edelweiss Asset Reconstruction Company Limited and ors., the High Court held that once a Resolution Plan is approved under Section 31 of IBC, all past claims or dues outside the Plan stand extinguished and the approved Plan binds all stakeholders, including tax authorities.
Want to Read the Complete Judgment?
You have read the free case summary. Unlock the full judgment, the detailed judicial reasoning and the downloadable PDF, along with every other premium judgment on TaxGuru.
Already subscribed? Log in
One subscription covers the entire premium judgment library, not just this case.
