Initiation of proceedings under GST post approval of resolution plan cannot be sustained

By POONAM GANDHI Goods and Services Tax Judiciary September 27, 2025

TaxGuru Citation: 2025 taxguru.in 8470
Case Name: Sintex BAPL Limited Vs State of Gujarat & Ors. (Gujarat High Court)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Courts: All High Courts, Gujarat High Court

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Sintex BAPL Limited Vs State of Gujarat & Ors. (Gujarat High Court)

Gujarat High Court held that post approval of resolution plan, there could be no occasion whatsoever for department to issue notices. Accordingly, GST notices issued alleging wrong claim of ITC quashed and set aside.

Facts- CIRP was initiated against the petitioner and on 17.03.2023, the National Company Law Tribunal passed an order approving the Resolution Plan of the petitioner under the provisions of the IBC. On 29.03.2023, the Resolution Plan was implemented. On 26.07.2024, an intimation u/s. 74(5) of the GGST Act and CGST Act for the period from July 2017 till March 2018, in Form GST DRC-01A was issued by the respondent No.2 for the alleged ineligible input tax credit claimed by the petitioner. The respondent No.2 advised the petitioner to pay an amount of Rs.6,74,77,650/-, including interest and penalty by 30.07.2024.

On 02.07.2025, the petitioner filed two detailed responses, in Form GST DRC-06 to both SCN-5 and SCN-6, requesting the respondents No.4 and respondent No.3 to withdraw the SCN-5 considering that the approved Resolution Plan extinguishes all claims, demands, debt and liabilities for a period prior to the approval of the Resolution Plan.

Conclusion- Held that it is clear that on the complete extinguishment of all tax liabilities of the Corporate Debtor upon the approval of the Resolution Plan on 17.03.2023, there could be no occasion whatsoever for the respondents to issue the impugned notices. Resultantly, the petition succeeds and the (i) order dated 8^th April 2022 for FY 2019-20 passed by Respondent No.2, (ii) order dated 9^th December 2024 for FY 2017-18 passed by Respondent No.2; (iii) order dated 15^th February 2025 for FY 2020-21 passed by Respondent No.3 against the petitioner; and (iv) Notice dated 5^th June 2025 for FY 2021-22 issued by Respondent No.2; (iv) Show Cause Notice dated 12^th June 2025, for FY 2018-19 issued by Respondent No.4; (vi) Show Cause Notice dated 27^th June 2025, for FY 2018-19 issued by Respondent No.4; and (vii) Show Cause Notice dated 30^th June 2025 for FY 201819 issued by Respondent No.3 along with all other proceedings or coercive action relating thereto are hereby quashed and set aside.