Case Law Details
ESL Steel Limited Vs Principal Commissioner (Jharkhand High Court)
Jharkhand High Court held that as liability of earlier management cannot be shifted to current management, similarly, credit of earlier management cannot be shifted to current management. Hence, claim of transitional credit prior to the approval of the resolution plan by the National Company Law Tribunal (NCLT) is not allowable.
Facts- The State Bank of India, being the major financial institution of the Petitioner, had filed a Company Petition before the National Company Law Tribunal, Kolkata, under the provisions of the Insolvency and Bankruptcy Code, 2016, for initiating the corporate insolvency resolution process of the Petitioner. The Application of SBI was admitted, and a Resolution Professional was appointed as the Interim Insolvency Resolution Professional (IRP).
During the course of its proceedings, the Resolution Professional filed a Resolution plan, which was approved by the Committee of Creditors (CoC) by 100% voting shares of the Committee of Creditors (CoC). The same was also approved by the NCLT.
However, before the approval of Resolution Plan and during the pendency of IBC proceedings, the earlier Management of the Petitioner Company had filed the original TRAN-1 and while filing the Form TRAN-1, as GST Portal did not allow the Petitioner to disclose and transition the CENVAT Credit on the Capital Goods received during the months of July and August 2017, amounting to Rs. 92,13,412.
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