Approval of Resolution Plan by NCLT Abates appeals before CESTAT: CESTAT [Read Order]

The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that the approval of Resolution Plan by the National Company Law Tribunal ( NCLT ) abates appeals before the CESTAT.

The appellant filed refund of service tax amounting to Rs. 26,81,275/- paid on the services of Transport of Goods by Road for the period 16.11.1997 to 02.06.2008 and interest of Rs. 87,050/- before the Assistant Commissioner of Service Tax, Panchkula. The Assistant Commissioner after following the due process has rejected the refund of the appellant and thereafter, the appellant challenged the order of the Assistant Commissioner before the Commissioner ( Appeals ) who has also upheld the order of the Assistant Commissioner and thereafter, the appellant has filed the present appeal.

During the pendency of this appeal, the appellant-assessee faced financial difficulties and an application was filed by one of the financial creditors under section 7 of the Insolvency and Bankruptcy Code, 2016 for recovering debts due from the appellant-assessee company.

The National Company Law Tribunal, ( NCLT ) Mumbai Bench initiated Corporate Insolvency Resolution Process ( CIRP ) against the appellant-assessee company vide its order dated 17.01.2020 under Section 7 of the Insolvency and Bankruptcy Code, 2016.

Accordingly, a Resolution Plan was floated by the Resolution Professional for approval of the committee of creditors. The Resolution Plan submitted before NCLT Mumbai was approved by NCLT vide its order dated 31.03.2023 and the Resolution Plan became effective from this date i.e. 31.03.2023.

The Counsel appearing for the appellant submitted that in the Resolution Plan, there has not been any provision made with regard to the pendency of this case.

A Two-Member Bench comprising SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “By following the ratio of the above said decisions, we are of the considered view that once the Resolution Plan has been approved by the NCLT, thereafter, the present appeal stands abated as the CESTAT has become functus officio in the matter relating to the present appeal.”

To Read the full text of the Order CLICK HERE

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