The Commissioner Of State Tax Of Gujarat vs Ramchandra D. Chaudhary Liquidator Of ...
- CitationCompany Appeal (AT) (Insolvency) No. 1501 of 2024
Ratio decidendi
The rule this decision rests on
Where a liquidation order under Section 33 of the Insolvency and Bankruptcy Code, 2016 is passed, the moratorium under Section 14 ceases to have effect only from the date of that liquidation order, so the corporate insolvency resolution process is treated as continuing until that date; a Committee of Creditors' decision to liquidate does not by itself end the moratorium, and liquidation commences only upon the Adjudicating Authority's order. Consequently, an attachment order issued by a statutory authority before the date of the liquidation order falls within the moratorium period and cannot be sustained, and the Adjudicating Authority is entitled to direct that it be set aside notwithstanding the statutory recovery power invoked by the authority.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
IN THE MATTER OF: The Commissioner of State Tax of Gujarat ...Appellant Versus Ramchandra D. Chaudhary, Liquidator of Anil Ltd. & Anr. ...Respondents
Present: For Appellant : Ms. Aastha Mehta and Ms. Prerna Mohopatra, Advocates.
For Respondents : Mr. Atul Sharma, Ms. Aditi Sharma and Mr. Vikram Choudhary, Advocates.
ORDER
(Hybrid Mode)
23.08.2024 : Heard Counsel for the Appellant as well as Learned
Counsel appearing for the Respondent.
2. This Appeal has been filed against an Order dated 21.06.2024, by which
Order, Adjudicating Authority on the Application filed by the Appellant being
I.A. No. 501 of 2020 has allowed the Application and directed the Attachment
Order dated 16.10.2018 issued by Appellant to be set aside.
3. Learned Counsel for the Appellant submits that in the present case,
Corporate Insolvency Resolution Process (`CIRP') commenced on 23.08.2017
and more than 180 days were over and the Attachment Order was passed on
16.10.2018. It is submitted that there is a statutory power of the Department
under Section 45 of the Gujarat Value Added Tax Act, 2003, which cannot be
taken away by Section 14 of the Insolvency and Bankruptcy Code, 2016, (for
short `The Code').
4. Learned Counsel for the Respondent submits that Liquidation Order in
the present case was passed on 25.10.2018 hence CIRP will be treated to have continued till 25.10.2018 and the Attachment Order having been passed prior
to the said date cannot be sustained and the Adjudicating Authority has
rightly directed for setting aside the Attachment Order.
5. We have considered the submissions of Counsel for the Parties and
perused the record.
6. There is no dispute in the present case that the Order of CIRP was
passed on 23.08.2017 and Order of Liquidation was passed on 25.10.2018
whereas the date of Attachment is 16.10.2018.
7. Counsel for the Respondent referred to Section 14(4) of the IBC which
provides as follows:
"14. Moratorium. -(4) The order of moratorium shall have effect from the date of such order till the completion of the corporate insolvency resolution process:
Provided that where at any time during the corporate insolvency resolution process period, if the Adjudicating Authority approves the resolution plan under sub-section (1) of section 31 or passes an order for liquidation of corporate debtor under section 33, the moratorium shall cease to have effect from the date of such approval or liquidation order, as the case may be."
8. In the present case, Liquidation Order having been passed on
25.10.2018, submission of the Appellant cannot be accepted that CIRP came
to an end before said date, even if the Committee of Creditors (`CoC') has
decided to liquidate the Corporate Debtor but till the Order is passed by the
Adjudicating Authority, Liquidation shall not commence. Liquidation
commencement being on 25.10.2018 i.e., subsequent to the Order of
Attachment.
Comp. App. (AT) (Ins.) No. 1501 of 2024 2 of 3
9. Adjudicating Authority did not commit any error in directing for setting
aside the Attachment Order.
We do not find any merit in the Appeal. The Appeal is dismissed.
[Justice Ashok Bhushan] Chairperson
[Barun Mitra] Member (Technical)
[Arun Baroka] Member (Technical) himanshu/nn
Comp. App. (AT) (Ins.) No. 1501 of 2024 3 of 3
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