Department Of State Tax vs Cicil Biochem Private Limited & Anr

In the matter of: Department of State Tax Through The Dy. Commr. of ....Appellant State Tax Vs. Cicil Biochem Pvt. Ltd. & Anr. ...Respondents For Appellant Ms. Shwetal Shepal, Advocate. For Respondents

ORDER

(Hybrid Mode)

19.09.2024: I.A No.4835 of 2024:- This is an application praying for

Condonation of 15 days' delay in filing the Appeal. The ground taken in the

application is that the Additional Affidavit filed by the Appellant is that

necessary time was taken to seek permission to file the Appeal and to collect

the documents. Cause shown sufficient. Delay is condoned.

Company Appeal (AT) (Insolvency) No. 1332 of 2024 :-

This Appeal has been filed against the order dated 19.10.2023 by which

IA filed by the Resolution Professional being IA No.906 of 2021 for approving

the Resolution Plan has been allowed. The Appellant aggrieved by the said

order has come up in this Appeal.

2. Counsel for the Appellant submits that the Appellants' claim was

admitted for an amount of Rs.838304408/- and in the plan, Appellant has

been paid only 0.13%. Counsel for the Appellant submits that the Appellant is 2

secured creditor in view of the judgment of the Hon'ble Supreme Court in

"State Tax Officer vs. Rainbow Papers Limited- 2022 SCC OnLine SC

1161". It is submitted that the Adjudicating Authority has committed error in

not accepting the entire claim of the Appellant. Reliance has been placed on

Section 37 of the Maharashtra Value Added Tax Act, 2002.

3. The issue which is raised in the present Appeal has already been

considered and decided by this Tribunal in "Department of State Tax vs.

Zicom Saas Pvt. Ltd. & Anr- Company Appeal (AT) (Insolvency) No. 246 of

2022". This Tribunal in paragraphs 7 to 10 in the above order dated

07.02.2023 laid down following:-

"7. There are no dispute between the parties regarding the facts which took place in the CIRP and the claim which was admitted in the CIRP. In "Rainbow Paper Limited" (supra), Section 48 of the GVAT Act was relied, which has been quoted in paragraph 2 of the Judgement which is to the following effect:

"The short question raised by the appellant in this appeal is, whether the provisions of the IBC and, in particular, Section 53 thereof, overrides Section 48 of the GVAT Act which is set out herein below for convenience:-

48. Tax to be first charge on property.- Notwithstanding anything to the contrary contained in any law for the time being in force, any amount payable by a dealer or any other person on account of tax, interest or penalty for which he is liable to pay to the Government shall Company Appeal (AT) (Insolvency) No. 1332 of 2024 & I.A. No. 4394, 4835 of 2024 3

be a first charge on the property of such dealer, or as the case may be, such person"

8. The Provision of Section 37 of Maharashtra Value Added Tax, 2002 is to the following effect:

"37. Notwithstanding anything contained in any contract to the contrary, but subject to any provision regarding creation of first charge in any Central Act for the time being in force, any amount of tax, penalty, interest, sum forfeited, fine or any other sum, payable by a dealer or any other person under this Act, shall be the first charge on the property of the dealer, or as the case may be, person."

9. When we compare the provisions of Section 48 of the provision of Gujarat Values Added Tax which was relied in "Rainbow Papers Limited" and the Provisions of Section 37 which is sought to be relied on in the present Appeal, distinction between the provisions is clear. Section 37 specifically uses the expression "subject to any provision regarding creation of first charge in any central act". The provision itself contemplated thus that Section 37 was subject to any provision in Central Act. The IBC Section 53 itself provides waterfall mechanism which may be treated to be law which has been contemplated under Section 37 of the MVAT Act, 2002.

10. We thus are of the view that the Judgement of the Hon'ble Supreme Court in "Rainbow Paper Limited" relied by Learned Counsel for the Appellant is distinguishable. The Appellant having been treated as Operational Creditor allocation of amount in the Resolution Plan cannot be said to be in violation

Company Appeal (AT) (Insolvency) No. 1332 of 2024 & I.A. No. 4394, 4835 of 2024 4

of Section 30 (2)(b). We thus are of the view that no ground has been made to interfere with the Impugned Order.

The Appeal is dismissed."

4. The above judgment of this Tribunal fully covers the issue raised in this

Appeal. Following the said judgment, this Appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Arun Baroka] Member (Technical) Anjali/nn

Company Appeal (AT) (Insolvency) No. 1332 of 2024 & I.A. No. 4394, 4835 of 2024