Patna High Court
M/S Isolux Corsan India Engineering And ... vs The State Of Bihar on 1 August, 2024
Bench: Chief Justice, Partha Sarthy
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.13042 of 2022
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M/s Isolux Corsan India Engineering and Construction Private Limited
through its Liquidator CA Rajeev Bansal, aged about 40 years, S/o Shri
Lakshmi Narayan Bansal, R/o 2163A, Shri Nagar Colony, Jagadhri,
Yamunanagar, Haryana - 135003.
... ... Petitioner/s
Versus
1. The State of Bihar through its Commissioner-Cum-Principal Secretary,
Commercial Tax Department, Government of Bihar, Vikas Bhawan, Bailey
Road, Patna - 800015.
2. The Commissioner-cum-Principal Secretary, Commercial Tax Department,
Government of Bihar Vikas Bhawan, Bailey Road, Patna- 800015.
3. The Joint Commissioner of Commercial Taxes (JCST), GST Department,
Sasaram Circle, Sasaram, Bihar - 821115.
4. The Deputy Commissioner of Commercial Taxes (DCCT), GST Department,
Sasaram Circle , Sasaram, Bihar - 821115.
5. The Accountant General (Audit) Bihar, Patna, Indian Audit and Accounts
Department, Office of the Accountant General (Audit), Bihar Mahalekhakar
Bhawan, Birchand Patel Marg, R-Block, Patna, Bihar-800001.
... ... Respondent/s
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Appearance :
For the Petitioner/s : Mr. Abhinav Mishra, Advocate
Ms. Nivedita Chauhan, Advocate
Mr. Kunal Tiwary, Advocate
Ms. Komal Singh, Advocate
Ms. Jagriti Dosi, Advocate
For the Respondent/s : Mr.Vikash Kumar, SC-11
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CORAM: HONOURABLE THE CHIEF JUSTICE
and
HONOURABLE MR. JUSTICE PARTHA SARTHY
ORAL JUDGMENT
(Per: HONOURABLE THE CHIEF JUSTICE)
Date : 01-08-2024
The writ petition is filed by an assessee which is
under liquidation by orders of the National Company Law
Patna High Court CWJC No.13042 of 2022 dt.01-08-2024
Tribunal (for brevity 'NCLT') Chandigarh Bench, Chandigarh.
The Liquidator who represents the assessee has been appointed
as per Annexure-2 order dated 06.02.2020 passed by the NCLT.
The Liquidator representing the assessee has come before this
Court with the writ petition challenging the re-assessment for
the year 2012-2013; translated copy of which order is produced
as Annexure-C along with the counter affidavit of Respondent
Nos. 3 and 4.
2. Learned Counsel for the petitioner contends that
the Liquidator was never issued with notice of re-assessment
and could not participate in the re-assessment. There are also
claims of refund which are being prosecuted for the years 2013-
2014 to 2015-2016 before the appropriate authority. In such
circumstance, there should be a proper assessment proceeding
taken with the participation of the petitioner. It is also pointed
out from Section 33 (5) of the Insolvency and Bankruptcy Code,
2016 (for brevity 'IBC') that when a liquidation order has been
passed, no suit or other legal proceeding shall be initiated
instituted by or against a corporate debtor. Reference is also
made to ABG Shipyard Liquidator v. Central Board of Indirect
Taxes & Customs, (2023) 1 SCC 472, wherein it has been
categorically stated that though the Taxes Department would be
Patna High Court CWJC No.13042 of 2022 dt.01-08-2024
entitled to make an assessment or determine the quantum of
duty, there could be no recovery made; for which the Liquidator
will have to be approached with a proper claim after the
assessment is finalised.
3. The learned Government Advocate, on the other
hand, submits that the order itself indicates that notices were
sent on e-mail and even the Advocate who was prosecuting the
refund application before the Tax Authorities was given notice,
who had informed the respondents that the company is in
liquidation. It is also pointed out from the judgment in ABG
Shipyard Liquidator (supra) that the clear direction is that only
when there is a moratorium under Section 14, there could be a
stay of recovery. Since the liquidation has commenced, there is
no further moratorium, is the contention.
4. With respect to the claim for recovery we have to
only look at the operative portion of ABG Shipyard Liquidator
(supra) and we extract from Paragraph No. 57:
57. On the basis of the above
discussions, following are our conclusions:
57.1. Once moratorium is imposed in
terms of Sections 14 or 33(5) of the IBC as the case
may be, the respondent authority only has a limited
jurisdiction to assess/determine the quantum of
customs duty and other levies. The respondent
authority does not have the power to initiate
Patna High Court CWJC No.13042 of 2022 dt.01-08-2024
recovery of dues by means of sale/confiscation, as
provided under the Customs Act.
57.2. After such assessment, the
respondent authority has to submit its claims
(concerning customs dues/operational debt) in
terms of the procedure laid down, in strict
compliance of the time periods prescribed under
the IBC, before the adjudicating authority.
57.3. In any case, the IRP/RP/liquidator
can immediately secure goods from the respondent
authority to be dealt with appropriately, in terms of
the IBC.
5. It has been categorically stated that the
moratorium spoken of under the IBC is either as per the terms of
Section 14 or Section 33(5) and that in such circumstance there
can be no recovery made though the authorities would be
entitled to assess or determine the quantum of duties or taxes.
6. In the present case, admittedly, in the case of the
assessee the liquidation proceedings had commenced by
Annexure-2 order dated 06.02.2020 and the Liquidator was
appointed. As we saw from Annexure-C, the notices were all
issued to the e-mail of the assessee after the Liquidator was
appointed which makes it clear that the Liquidator was never
informed of the re-assessment proceedings. In such
circumstances, Annexure-C suffers from the defect of the
Patna High Court CWJC No.13042 of 2022 dt.01-08-2024
assessee having not been heard.
7. In the present case, initially the State had also
objected to the filing of the writ petition, which was without
getting an approval from the NCLT. When the objection was
raised, the Liquidator had approached the NCLT for ex post
facto approval which was denied. An appeal to the National
Company Appellate Tribunal, however, found favour with the
contention and declared the writ petition filed to be one with
proper approval as granted by the Appellate Tribunal.
8. On the totality of the circumstances, we are of the
opinion that the Liquidator should be noticed and participated in
the re-assessment proceedings. Only for violation of principles
of natural justice, we set aside the Annexure-C order without
going into the merits of the matter. The Liquidator shall appear
before the Assessing Officer on 21.08.2024 after filing proper
objections. The assessment order at Annexure-C itself shall be
considered as a notice for re-assessment. After filing the
objection, the Assessing Officer shall hear the matter on the
same day or any other date with intimation to the Liquidator,
who is representing the assessee. The matter shall be considered
on merits and an assessment order passed, which again has to be
enforced only by filing a proper claim before the Liquidator and
Patna High Court CWJC No.13042 of 2022 dt.01-08-2024
going by the decision in ABG Shipyard Liquidator (supra).
Necessarily the demand notice with respect to Annexure C
assessment order for 2012-2013 would stand quashed. As far as
the refund for the years 2013-2014 to 2015-2016, we are not
called upon to consider the issue at all.
9. We hence allow the writ petition with the above
directions.
(K. Vinod Chandran, CJ)
( Partha Sarthy, J)
Anushka/-
AFR/NAFR
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