Gujarat High Court
Gsl Nova Petrochemicals Limited vs The Deputy Commissioner Of Income Tax, ... on 17 April, 2026
Author: A.S. Supehia
Bench: A.S. Supehia
NEUTRAL CITATION
C/SCA/10927/2022 JUDGMENT DATED: 17/04/2026
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 10927 of 2022
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
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Approved for Reporting Yes
No
✔
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GSL NOVA PETROCHEMICALS LIMITED
Versus
THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2(1)(1), AHMEDABAD
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Appearance:
MR TUSHAR HEMANI SENIOR ADVOCATE with MS VAIBHAVI K PARIKH(3238)
for the Petitioner(s) No. 1
DEV D PATEL(8264) for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 17/04/2026
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE PRANAV TRIVEDI)
1. Heard learned Senior Advocate Mr. Tushar Hemani assisted by learned advocate Ms. Vaibhavi Parikh for the petitioner and learned Senior Standing Counsel Mr. Dev Patel for the respondent.
2. With the consent of the learned advocates for the respective parties, the matter is taken up for hearing, as the issue involved is very short.
3. The petition has been filed under Article 226 of the Constitution of India with the following prayers :-
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NEUTRAL CITATION C/SCA/10927/2022 JUDGMENT DATED: 17/04/2026 undefined "(a) Quash and set aside the impugned notice as well as impugned order at Annexure-"A (Colly.)" to this petition;
(b) Pending the admission, hearing and final disposal of this petition, stay the implementation and operation of the impugned notice as well as impugned order at Annexure-"A (Colly.)" to this petition and stay further proceedings for Assessment Year 2018-19;
(c) Any other and further relief deemed just and proper by granted in the interest of justice;
(d) To provide for the cost of petition."
4. The brief facts of the case are as follows:
4.1. The petitioner is a company registered under the Companies Act, 1956. The petitioner had filed the return of income under the provisions of the Income Tax Act, 1961 (for short "the Act") for the Assessment Year 2018-19.
4.2. The case of the petitioner qua Assessment Year 2018-19 was proposed to be reopened by the issuance of a notice dated 30.03.2022 under Section 148 of the Act.
4.3. The petitioner was subjected to the insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 ("IBC"), wherein, a Corporate Insolvency Resolution Process ("CIRP") was initiated under Section 7 of the IBC, which was admitted by the Adjudicating Authority vide order dated 05.10.2021.
4.4. An Interim Resolution Professional was appointed by the National Company Law Tribunal (For short "Tribunal"), who made a public Page 2 of 9 Uploaded by PHALGUNI PATEL(HC00175) on Wed Apr 22 2026 Downloaded on : Thu Apr 23 00:25:18 IST 2026 NEUTRAL CITATION C/SCA/10927/2022 JUDGMENT DATED: 17/04/2026 undefined announcement in accordance with Sections 13, 15 and other relevant provisions of the IBC read with the Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Process of Corporate Persons) Regulations, 2016, (For short "Regulations, 2016") thereby inviting claims from the various creditors of the Petitioner.
4.5. Further, under the CIRP, the Resolution Plan of GSL Nova Petrochemicals Limited for the revival of the petitioner was approved by the Hon'ble Tribunal vide order dated 05.10.2021 under Section 30(6) of the IBC. The said Resolution Plan provided for the waiver and extinguishment of all the unassessed/assessed tax liabilities for the period prior to the Tribunal approval date.
4.6. The respondent has issued the impugned notice dated 30.03.2022, under Section 148 of the Act.
4.7. Challenging the legality of the impugned notice dated 30.03.2022 under Section 148 of the Act and impugned order dated 30.03.2022 passed under Section 148A(d) of the Act, the petitioner has filed this petition.
5. Learned Senior Advocate Mr. Tushar Hemani assisted by learned advocate Ms. Vaibhavi Parikh appearing on behalf of the petitioner submitted that on the approval of the Resolution Plan under Section 31 of the IBC, all dues of the Corporate Debtor except those which have been specifically provided for in the Resolution Plan would stand extinguished in terms of the provisions of the IBC and the decisions of the Hon'ble Apex Page 3 of 9 Uploaded by PHALGUNI PATEL(HC00175) on Wed Apr 22 2026 Downloaded on : Thu Apr 23 00:25:18 IST 2026 NEUTRAL CITATION C/SCA/10927/2022 JUDGMENT DATED: 17/04/2026 undefined Court in the case of Committee of Creditors of Essar Steel India Ltd.
Through Authorised Signatory Vs. Satishkumar Gupta and Others reported in (2020) 8 SCC 531 and in case of Ghanshyam Mishra and Sons Pvt. Ltd. Through Authorised Signatory Vs. Edelweiss Asset Reconstruction Company Ltd., through the Directors & Ors. reported in (2021) 9 SCC 657. Learned Senior Advocate Mr. Tushar Hemani submitted that in the present case, the tax dues stand extinguished in terms of the Resolution Plan. 5.1. Learned Senior Standing Counsel Mr. Dev Patel for the respondent- Department is not in a position to controvert the position of law as far as the extinguishment of the tax dues are concerned in terms of Section 31 of the IBC. He however submits that in view of the said position, this Court may not enter into the merits of the issuance of notice under Section 263 of the Act.
6. DISCUSSION & FINDINGS :-
6.1. A perusal of the Resolution Plan which came to be approved on 05.10.2021 by the Tribunal would reveal the following provisions as evident from the relevant portion extracted below:-
"EFFECT OF THE RESOLUTION PLAN"
3.15. Tax Exemptions :
With the approval of Resolution Plan by the AA, it is assumed that an exemption shall be deemed to have been granted to the Corporate Debtor from the obligation to pay taxes in accordance with the Finance Act, 2020.
With the approval of this Resolution Plan by the Adjudicating Page 4 of 9 Uploaded by PHALGUNI PATEL(HC00175) on Wed Apr 22 2026 Downloaded on : Thu Apr 23 00:25:18 IST 2026 NEUTRAL CITATION C/SCA/10927/2022 JUDGMENT DATED: 17/04/2026 undefined Authority, it is assumed that, reasonable opportunity of being heard have been given to the jurisdictional Principal Commissioner of Income Tax or Commissioner of Income Tax and the Corporate Debtor shall be entitled to carry forward the unabsorbed depreciation and accumulated losses under Income Tax and minimum alternate tax and to utilize such amounts to set off against future tax obligations.
xxx xxx xxx
Other Terms :
a. Approval of this plan shall be deemed approval for waiver from filing of statutory returns (including but not limited to any filings for registrar of Companies, Direct and Indirect Tax authorities, plant related annual filings, etc.), for a period prior to Effective Date. Certified copy of the order approving Resolution Plan shall be a direction on such statutory authorities to allow GSL NOVA PETROCHEMICALS LIMITED to do compliance(s) with effect from and after the date of approval of Resolution Plan by the Adjudicating Authority. All the prior non compliance(s) should be adjudicated as complied.
b. Direction to authorities for providing key infrastructure facilities and approvals like Consent to Establish, Consent to Operate, Water approval, Railways approval, etc. c. Extinguishment and waiver of all dues to the Existing Promoter group by Corporate Debtor including but not limited to any Financial Debt owed to them. An order approving the Resolution Plan shall be a deemed order upon approving the Resolution Plan shall be a deemed order upon Financial Creditors to cancel all pledge/lien/other encumbrances upon the issued share capital of the Company to enable corporate action as envisaged in the Resolution Plan.
d. The Balance sheet of the Company as on effective date pursuant to approval of the Resolution Plan by the Adjudicating Authority shall stand restructured in terms of the provision of the approved resolution plan.
e. Resolution Plan has been made on the presumption that all the Assets as disclosed in the Information Memorandum, Financial Statements, Data Room and other documents is owned by the company and that there is no lease or encumbrances on the same except as mentioned in the security mapping being part of the Information Memorandum.Page 5 of 9 Uploaded by PHALGUNI PATEL(HC00175) on Wed Apr 22 2026 Downloaded on : Thu Apr 23 00:25:18 IST 2026
NEUTRAL CITATION C/SCA/10927/2022 JUDGMENT DATED: 17/04/2026 undefined f. After submission of the Resolution Plan or approval of the plan by the COC/ Adjudicating Authority, if the CIRP is stayed by any court then if the stay is not vacated within a reasonable period then the CoC would release any amount paid in terms of the Resolution Plan to the Resolution Applicant after receiving undertaking to the effect that the amount would again be deposited without any interest after such stay is withdrawn or the case is decided. Any non- compliance to the Resolution Plan in such eventuality or other unforeseen external factor should not be treated as non-performance by the Resolution Applicant for forfeiture of payment made or invocation of performance guarantee given under this Resolution Plan.
g. Resolution Applicant also reserves the right to review, rescind or terminate any contract, agreement or understandings that have been entered into by the GSL NOVA PETROCHEMICALS LIMITED prior to the cut-off date. It is assumed that all the material contracts been posted or made available to the resolution applicant on or before the submission of this Resolution Plan and it shall not be liable to pay any damages or charges or penalty for any breach of all such contracts or agreements which has not been provided before the submission of the Resolution Plan. Prayer is being hereby made to the Adjudicating Authority for passing necessary order with respect to the above clause while approving the resolution plan placed before it.
h. Having said the above, each such amount / claim / liability, is a "claim" and "debt" each as defined under the IBC and would consequently qualify as "operational debt" (as defined under the IBC) and therefore the full amount of such claims shall be deemed to be owed and due as of the Insolvency Commencement Date, and no payments is envisaged against such claim or debt.
Maximum envisaged amount for payment to the Financial and Operational Claim stands at Rs. 0.15 Crores.
i. Any person (including the Existing or earlier Promoter Group) that has provided any form of security for and on behalf of, and / or in order to secure any obligations of the Company (whether by way of hypothecation, pledge, mortgage, guarantee or otherwise) shall not be entitled to exercise any subrogation rights in respect of such arrangement and they shall have no rights or claims against the Company. All obligations, Liabilities, claims or proceedings against the Company in this regard shall be deemed to be owed and due as of the Insolvency Commencement Date and shall immediately, irrevocably and unconditionally stand extinguished, waived, withdrawn and abated on and from the Page 6 of 9 Uploaded by PHALGUNI PATEL(HC00175) on Wed Apr 22 2026 Downloaded on : Thu Apr 23 00:25:18 IST 2026 NEUTRAL CITATION C/SCA/10927/2022 JUDGMENT DATED: 17/04/2026 undefined Closing Date.
j. The Company shall have no Liabilities towards the persons currently classified as promoter or promoter group (including the Existing Promoter Group), persons acting in concert with promoters, holding companies, subsidiary companies, associate companies, Group Companies and / or their respective Affiliates / associates). However, it is clarified that all claims of the Company against such related parties (and all Liabilities of such related parties towards the Company) shall remain outstanding due and payable to the resolution applicant in accordance with their terms.
k. Any Liabilities, claims, demands, capital contributions or any other form of financial commitment; including but not limited to pledge of shares or any security interest created or provided, whether guaranteed or contractually agreed in writing or otherwise by the Company on behalf of or for its subsidiary companies, associate companies, Group companies and/or their respective Affiliates, shareholders/ associates; as the case may be, which are in existence prior to the effective Date or at any time thereafter, shall standing irrevocably and unconditionally waived and extinguished.
l. Resolution Applicant further states that the plan demonstrates that it addresses the cause of default, it is feasible and viable, it has provisions for its effective implementation, it has provisions for approvals required and the timeline for the same and that the resolution applicant has the capability to implement the plan."
7. From the perusal of the above, it is evident that all tax liabilities, assessed and unassessed under the Income Tax Act, 1961 "shall stand waived and extinguished".
8. In case of Committee of Creditors of Essar Steel India Ltd. (Supra),the Hon'ble Apex Court has held as under:-
"107. For the same reason, the impugned NCLAT judgment in holding that claims that may exist apart from those decided on merits by the resolution professional and by the Adjudicating Authority/Appellate Tribunal can now be decided by an appropriate forum in terms of Section 60(6) of the Code, also militates against Page 7 of 9 Uploaded by PHALGUNI PATEL(HC00175) on Wed Apr 22 2026 Downloaded on : Thu Apr 23 00:25:18 IST 2026 NEUTRAL CITATION C/SCA/10927/2022 JUDGMENT DATED: 17/04/2026 undefined the rationale of Section 31 of the Code. A successful resolution applicant cannot suddenly be faced with "undecided" claims after the resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution applicant who would successfully take over the business of the corporate debtor. All claims must be submitted to and decided by the resolution professional so that a prospective resolution applicant knows exactly what has to be paid in order that it may then take over and run the business of the corporate debtor. This the successful resolution applicant does on a fresh slate, as has been pointed out by us hereinabove. For these reasons, NCLAT judgment must also be set aside on this count."
9. In the case of Edelweiss Asset Reconstruction Company Ltd., (Supra), the Hon'ble Apex Court has categorically held as under:-
"102.1 That once a resolution plan is duly approved by the adjudicating authority under sub-section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the corporate debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the adjudicating authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan.
102.2 The 2019 Amendment to Section 31 IBC is clarificatory and declaratory in nature and therefore will be effective from the date on which IBC has come into effect.
102.3 Consequently all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the adjudicating authority grants its approval under Section 31 could be continued.
xxx xxx xxx 138 In the forgoing paragraph, we have held that the 2019 Amendment to Section 31 IBC is clarificatory and declaratory in nature and therefore will have a retrospective operation. As such, when the resolution plan is approved by NCLT, the claims, which Page 8 of 9 Uploaded by PHALGUNI PATEL(HC00175) on Wed Apr 22 2026 Downloaded on : Thu Apr 23 00:25:18 IST 2026 NEUTRAL CITATION C/SCA/10927/2022 JUDGMENT DATED: 17/04/2026 undefined are not part of the resolution plan, shall stand extinguished and the proceedings related thereto shall stand terminated. Since the subject-matter of the petition are the proceedings which relate to the claims of the respondents prior to the approval of the plan, the same cannot be continued. Equally the claims, which are not part of the resolution plan, shall stand extinguished."
10. Therefore, applying the decisions of the Hon'ble Apex Court to the facts of the present case, it is clear that on the complete extinguishment of all tax liabilities of the Corporate Debtor upon the approval of the Resolution Plan on 05.10.2021, there could be no occasion whatsoever for the respondents to issue the impugned order under clause (d) of Section 148A of the Act on 30.03.2022 as well as notice under Section 148 of the Act on 30.03.2022. In such view of the matter, the merits of the impugned notice under Section 148 of the Act have become academic and need not be ventured into by this Court.
11. Resultantly, the petition succeeds and the impugned notice under Section 148 of the Act and impugned order under Section 148A(d) of the Act dated 30.03.2022 are hereby quashed and set aside. Rule is made absolute to the aforesaid extent. No order as to costs.
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