Orissa High Court
Sree Metaliks Limited vs Director General Of Income ..... ... on 6 February, 2025
Author: Arindam Sinha
Bench: Arindam Sinha, M.S.Sahoo
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.16985 of 2024
Sree Metaliks Limited, ..... Petitioners
Keonjhar and another
versus-
Director General of Income ..... Opposite Parties
Tax, Bengalur and others
Advocates appeared in this case:
For Petitioners : Mr. Sidharth Ray, Sr. Advocate
For Opposite Parties : Mr. Avinash Kedia, Advocate
(Junior Standing Counsel)
CORAM:
THE HON'BLE MR. JUSTICE ARINDAM SINHA,
ACTING CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE M.S.SAHOO
JUDGMENT
-------------------------------------------------------------------------------------------------------
Date of hearing and judgment: 6th February, 2025
-------------------------------------------------------------------------------------------------------
ARINDAM SINHA, ACJ.
1. The writ petition was moved on 16th July, 2024, when
revenue obtained direction for filing counter. Submissions made by
Mr. Ray, learned senior advocate appearing on behalf of petitioners,
as recorded in paragraph-1 of order made that day are reproduced
below.
"1. Mr. Ray, learned senior advocate appears on
behalf of petitioners and submits, demand has been
W.P.(C) no.16985 of 2024
raised by revenue upon his client, who is successful
Resolution Applicant (RA), regarding arrear tax dues as
mentioned in letter dated 19th June, 2024. On query made
Mr. Ray points out, in paragraph 3.9 of the writ petition
his client has clearly stated that the claim was not placed
before the Resolution Professional (RF).
2. Today, with reference to his submissions recorded in
aforesaid order dated 16th July, 2024, he draws attention to, inter
alia, paragraph-7 in the counter. A passage from the paragraph is
reproduced below.
"7. That in response to the averment made in paragraph
3, Sub-paragraph 3.7 of the writ petitions containing of
the Petition is concerned, the opposite parties humbly
submitted that the contention made by the petitioner is
not sustainable. That the publication was applicable only
for corporate and individual agencies and not for Govt.
and since IT Dept. was not aware of the same. It skipped
the attention of the authority. ... ..."
(emphasis supplied)
3. He relies on judgment of the Supreme Court in Ghanashyam
Mishra and Sons (P) Ltd. v. Edelweiss Asset Reconstruction
Company Limited, reported in (2021) 9 SCC 657, paragraph-
102.1. The paragraph is reproduced below.
W.P.(C) no.16985 of 2024
"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."
He submits, the declaration of law is reiteration of provision in
section 31(1) in Insolvency and Bankruptcy Code, 2016.
4. Mr. Kedia, learned advocate, Junior Standing Counsel
appears on behalf of revenue and draws attention to paragraph-3.2,
page-110 in the writ petition. In the stated table of statutory/other
legal liabilities there is provision for 'income tax old' at
₹14,26,69,327.27/-. Subsequent disclosure in the writ petition also
provides for manner, in which said amount, approved in the
resolution process, was to be paid by petitioner. It remains unpaid.
In the circumstances, adjustment of the refund against old income
tax dues was duly made.
W.P.(C) no.16985 of 2024
5. In reply Mr. Ray refers to appeal effect order dated 23 rd
April, 2024. He reiterates, the refund was due to his client and there
was no tax dues placed for approval in the resolution process. Clear
admission is there in the counter. Furthermore, no notice of the
adjustment to be made was given to his client. In the circumstances,
there be direction for disbursement of the refund on holding the
adjustment made to be bad.
6. We have ascertained that 'old income tax dues' were
considered in the resolution process. The process received approval
on 7th November, 2017 by the National Company Law Tribunal
(NCLT). The Supreme Court in Ghanashyam Mishra (supra)
reiterated operation of section 31(1).
7. It appears from the appeal effect order, relevant assessment
year was 2010-11, in respect of which there was refund of
₹6,00,71,354/-. This amount, revenue has adjusted. Old income tax
dues, taken into consideration in the resolution process, thereby
stands reduced by the refund amount. It is not necessary for us to go
into working of manner of liquidation of the old dues approved in
the resolution process. As aforesaid, adjustment of the refund
pertaining to assessment year 2010-11, an assessment within the
period giving rise to old tax dues in balance sheet of the corporate
W.P.(C) no.16985 of 2024
debtor, considered in the resolution process and approved, thus has
effect of reducing said dues by the adjustment made.
8. Even otherwise we reject petitioner's claim to have the
refund because petitioner can only claim to step into and manage
affairs of the corporate debtor from date of approval of the
resolution plan. Petitioner cannot claim to have paid tax on
assessment made for assessment year 2010-11. Refund in respect of
that assessment year cannot be due to petitioners, who stepped into
shoes of management of the corporate debtors on and from 7 th
November, 2017 and proceeded to revive it per the approved
resolution plan. Petitioners having assailed the adjustment made by
filing the writ petition, cannot still rely on alleged omission to
notice them on the adjustment.
9. The writ petition does not bear merit. It is dismissed.
( Arindam Sinha )
Acting Chief Justice
( M.S. Sahoo )
Judge
W.P.(C) no.16985 of 2024
