GST Dept‘s Claims become Invalid on approval of Resolution Plan by NCLT: Allahabad HC [Read Order]
All other creditors are prohibited from bringing their claims after the NCLT has approved the Resolution Plan because doing so would cause the resolution process to be disrupted
![GST Dept‘s Claims become Invalid on approval of Resolution Plan by NCLT: Allahabad HC [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/04/NCLT-Resolution-Plan-by-NCLT-GST-Depts-Claims-taxscan.jpg "GST Dept‘s Claims become Invalid on approval of Resolution Plan by NCLT: Allahabad HC [Read Order]")
The Allahabad High Court has held that the claims of the Goods and Services Tax Department become invalid on approval of resolution plan by the National Company Law Tribunal (NCLT). Bill Printing and Dispatch Held Not Taxable as Business Auxiliary Service: CESTAT Sets Aside Demand[Read Order] On October 10, 2020, the petitioner, Arena Superstructures Private Limited, was admitted to...
The Allahabad High Court has held that the claims of the Goods and Services Tax Department become invalid on approval of resolution plan by the National Company Law Tribunal (NCLT).
Bill Printing and Dispatch Held Not Taxable as Business Auxiliary Service: CESTAT Sets Aside Demand[Read Order]
On October 10, 2020, the petitioner, Arena Superstructures Private Limited, was admitted to the Corporate Insolvency Resolution Process, and a Resolution Professional was assigned. A special notice was given to the GST Department while creditors were being asked to file their claims pertaining to the petitioner. On July 19, 2022, the NCLT approved the Resolution Plan.
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In accordance with Section 74(9) of the Goods and Service Tax Act, 2017, the GST Department issued an order on February 4, 2025, for the Assessment Year 2017–18. The petitioner petitioned the High Court to have the order dated 04.02.2025 and the demand notice that followed quashed.
The Supreme Court in Vaibhav Goyal & Another Vs. Deputy Commissioner of Income Tax & Another, held that if the statutory dues owed to the Government do not form a part of the Resolution Plan on the date of its approval, then such dues shall extinguished as reviving such claims after the approval of resolution plan will hamper the process of recommencement of business of the corporate debtor.
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The Court relied on its judgment in M/S NS Papers Limited And Another Vs. Union of India Through Secretary and Others where it had held that “The law cannot be read in a manner wherein the basic structure of the Code is breached by hindering the flow of the same by creation of roadblocks and dams – the underlying principle of the Code is to give a fresh start to the Resolution Applicant. Any new liability being fastened after the approval of the Resolution Plan would inherently and palpably be illegal and go beyond the Lakshman Rekha of the Code.”
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The bench of Justices Shekhar B. Saraf and Dr. Yogendra Kumar Srivastava held that it is a well-established principle that all other creditors are prohibited from bringing their claims after the NCLT has approved the Resolution Plan because doing so would cause the resolution process to be disrupted.
As a result, the Court invalidated the contested order together with the demand notice that followed.
To Read the full text of the Order CLICK HERE
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