The Gujarat High Court abated income tax appeals filed by the Commissioner of Customs (Preventive) due to the failure to file a claim during insolvency proceedings.
The appeals arose from an order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on issues related to customs duty on crude palm oil imports under Section 130 of the Customs Act, 1962.
Dipen Desai, representing the respondent, submitted that these Tax Appeals would not survive qua the respondent and the same would abate in view of the reasoning assigned by this court in similar tax appeal.
The counsel for the respondent pointed out that the respondent was subject to resolution proceedings under the provisions of the Insolvency and Bankruptcy Code, 2016 after the respondent was merged with M/s. Ruchi Soya Industries Limited in the year 2006 and later on, M/s. Ruchi Soya Industries Limited was subjected to proceedings under the provisions of the IBC.
The court noted that the respondent had undergone insolvency proceedings and was merged with M/s. Ruchi Soya Industries Limited. The Resolution Plan for M/s. Ruchi Soya Industries Limited was approved by the National Company Law Tribunal (NCLT) in 2019, and M/s. Patanjali Foods Limited was declared the successful resolution applicant.
The respondent had not filed any claim before the Resolution Professional during the insolvency proceedings.
The bench of Justices Bhargav. D. Karia and Niral. R. Mehta observed that under Section 31 and 32A of the IBC, upon approval of the Resolution Plan, the liability of the corporate debtor for past offences is extinguished.
The Gujarat High Court held that the tax appeals became infructuous and were abated due to the appellant’s failure to file a claim during the company’s insolvency proceedings.
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