NCLAT determines that the Commissioner of State Tax Department's claims are appropriately classified as unsecured.
The National Company Law Appellate Tribunal (NCLAT), New Delhi Bench comprising Justice Rakesh Kumar Jain (Judicial Member) and Naresh Salecha & Indevar Pandey (Technical Members) was hearing an appeal and determined that the Commissioner of State Tax Department's claims were appropriately classified as unsecured because the Gujarat Sales Tax Act, 1969 did not contain provisions similar to Section 48 of the VAT Act, and claims processed during the moratorium and liquidation periods violated the Insolvency and Bankruptcy Code, 2016.
The NCLAT addressed the appeal of the Commissioner of State Tax Department against the NCLT’s decision of 31.10.2023. The NCLT had dismissed the Appellant’s request to treat their claims as secured debts during the liquidation process of M/s Anil Limited.
The NCLAT found that the Gujarat Sales Tax Act, 1969 does not have similar provisions to Section 48 of the Gujarat Value Added Tax Act, 2003. As a result, claims for AY 1994-95 to 1997-98 were classified as unsecured, a status confirmed by the Appellant. Claims for AY 2007-08 to 2012-13 were correctly recognized as secured debts since the relevant assessment orders were issued before the initiation of CIRP and the moratorium.
For AY 2013-14 and 2014-15, the NCLAT concluded that the claims were processed post-moratorium and thus are treated as unsecured. Additionally, the claims for AY 2015-16 and 2016-17, processed during the liquidation period, violated the provisions of Section 14 and Section 33(5) of the IBC and were also treated as unsecured operational debts.
The NCLAT upheld the Respondent’s classification of the debts and found no merit in the Appellant’s appeal. The judgment confirmed that the Appellant’s claims were processed according to IBC provisions and relevant judicial precedents. Consequently, the appeal was dismissed, with no costs awarded and any pending interlocutory applications being closed.
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