The Kerala High Court directed to take decision after hearing the Official Liquidator in the matter of claim for unpaid service tax and central excise dues.
The appellant is a private limited company. By an order dated 08.03.2021, the National Company Law Tribunal initiated corporate insolvency resolution proceedings against the appellant company under the Insolvency and Bankruptcy Code, 2016.
As a consequence, the moratorium in terms of Section 14 of the Insolvency and Bankruptcy Code came into force with effect from 08.03.2021. Subsequently, an order of liquidation in terms of Section 33 of the Insolvency and Bankruptcy Code also came to be passed on 30.09.2022, and a fresh period of moratorium commenced with effect from that date.
While claims were invited by the Liquidator, the 1st and 2nd respondents also preferred a claim for unpaid service tax and central excise dues on the basis of the orders. A claim was also made by the 3rd respondent on the strength of the assessment orders and demand notices under the GST Act.
As the aforesaid orders were passed by the 1st, 2nd and 3rd respondents after the moratorium had commenced in terms of the provisions of the Insolvency and Bankruptcy Code, the appellant approached the writ court contending that the notice to the company in relation to the proceedings had been issued only in the name of the erstwhile Directors of the company and not the Official Liquidator, who had been appointed in the meantime, and hence the proceedings could not have been finalised without hearing the Official Liquidator.
The said contention was not, however, accepted by the Single Judge, who was of the view that there was no bar for finalisation of assessment and adjudication proceedings merely upon the ground that a reference on the insolvency resolution process had been admitted and there was a consequent moratorium for recovery of tax.
A Division Bench of Justice Dr AK Jaysasankaran Nambiar and Justice Kauser Edappagath observed that “On a consideration of the rival submissions and taking note of the submission of the learned standing counsel for the respondents that fresh orders can be passed in the matter by respondents 1, 2, and 3, after hearing the Official Liquidator within two months from today.”
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