Case Law Details
Electrosteel Steels Limited Vs State of Jharkhand (Jharkhand High Court)
Facts The assessee company had challenged the garnishee order issued u/s 46 of the JVAT Act, asking the respondent Bank to pay into the Government Treasury, the sum of Rs. 37,41,41,602, on account of tax / penalty due under the JVAT Act, from the assessee company, who failed to deposit the taxes for the period from 2011-12 & 2012-13, from the Bank account of the Company. The assessee Company had also challenged the letter dated 22.11.2009, issued by the State Tax Officer, Bokaro to the Respondent Bank, to deposit the amount of Rs.75,57,000/- by way of demand draft in favour of the Deputy Commissioner, Commercial Taxes, Bokaro in view of the fact that pursuant to the garnishee order, the respondent Bank had furnished the information that only the amount of Rs.75,57,000/- was available in the assessee’s account. The assessee claimed that the amount, could no more be realised by the State Government from the Company, in view of the fact that the State Bank of India had filed a Company Petition, before the NCLT under the IB Code, which was admitted by the NCLT and the interim resolution professional was appointed. The resolution plan was made and approved. Upon approval of the Resolution Plan, M/s. Vedanta Limited took over the management of the assessee Company. According to the assessee, since no claim was made by the State Government as regards the tax liability in the corporate insolvency resolution process, the claim of the Government was now barred u/s 31 of the IB Code.
Decision of the Hon’ble High Court
Whether once resolution plan is approved, tax liability of Company which is not claimed by the State Government during insolvency resolution process, is completely barred under Section 31 of the IB Code – NO
Whether if State Government has never been involved in corporate insolvency resolution process, such plan cannot be a binding on it and it can claim outstanding tax liabilities – YES
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