Vaibhav Goel & Anr. Vs DCIT (Supreme Court of India)
Summary: The Supreme Court allowed an appeal under Section 62 of the Insolvency and Bankruptcy Code, 2016 concerning income-tax demands raised against corporate debtor M/s. Tehri Iron and Steel Casting Ltd. after approval of its resolution plan. The appellants, who were joint resolution applicants, had submitted a resolution plan dated 21 January 2019, which was approved by the NCLT on 21 May 2019.
While the plan specifically recorded a contingent income-tax liability for AY 2014-15, the Income Tax Department subsequently issued demands concerning AYs 2012-13 and 2013-14. Admittedly, no claims concerning those two assessment years had been submitted to the Resolution Professional before approval of the resolution plan. The NCLT rejected the challenge to the subsequent demands as frivolous and imposed costs of Rs.1 lakh, while the NCLAT dismissed the ensuing appeal. The Supreme Court examined Section 31(1) of the IBC and applied Ghanashyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd., holding that once a resolution plan is approved, claims not forming part of it—including statutory dues owed to the Central Government—stand extinguished and proceedings concerning such claims cannot continue. The Court rejected the NCLAT’s approach of disregarding the binding precedent merely because it had not been cited before the NCLT.
