Whether Income Tax Dues are to be considered as Secured Creditor for the Purpose of CIRP Process

Income Tax Department Appellant) preferred an appeal against decision of Hon'ble NCLT National Company Law Tribunal) Guwahati Bench in the matter of Assam Company India Ltd Respondents) vide Company Appeal AT) Insolvency) No. 243 of 2022 before Hon'ble National Company Law Appellate Tribunal NCLAT).

- Surendra Rahalkar

Facts of the case:

1. Financial Creditor filed application against the respondent for initiation of Corporate Insolvency Resolution Process CIRP} and the same was admitted via order dated 26.10.2017, subsequently Resolution plan was approved on 20.09.2018 which do not contain any provision relating to payment of operational creditors and claims made by government authorities.

2. Appellant submitted their demand notice on 14.11.2017 Before approval of Resolution Plan) with resolution professional which were outstanding demand amounting to Rs.16,20,25,953 Rupees Sixteen Crores Twenty Lakhs Twenty-Five Thousand Nine Hundred Fifty-Three) for the assessment years 1314and 14-15 respectively.

3. Resolution professional communicated appellant that the claim of the Department would not be admitted since the Respondent has preferred an appeal with the Commissioner of Income Tax Appeals) for both the aforementioned Assessment Years. The Resolution Professional, however, communicated that after the Final order of the CIT(A), the new promoter of the Respondent would pay the demand which is astatutory liability.

4. Subsequently, Resolution Professional intimated vide email dated 08.08.2018 that the Hon'ble NCLT Guwahati Bench may consider payment of Rs 1,97,92,084/being 15% of the outstanding dues owed to the Appellants since the Respondent had filed petition for stay of demand before the Assessing Officer. The Respondent failed to deposit the required tax amount and as such the proposed stay demand was considered qulland void" and the entire amount of Rs 16,20,25,953/was outstanding and collectible demand as on the date of CIRP.