1. Paragraph 1: Background of the Case
“This appeal under Section 62 of Insolvency and Bankruptcy Code, 2016 (for short, ‘the IB Code’) takes an exception to the judgment and order dated 25th November 2021 passed by the National Company Law Appellate Tribunal (‘the NCLAT’).”
2. Paragraph 2: Resolution Plan and Contingent Liabilities
“The Resolution Plan had referred to the liability of Rs.16,85,79,469/- (Rupees Sixteen-crores, eighty-five lakhs, seventy-nine thousand, four-hundred and sixty-nine only) of the first respondent (Income Tax Department) for the assessment year 2014-15 based on the demand dated 18th December 2017 which was rectified under section 154 of the Income Tax Act, 1961.”
3. Paragraph 5: Legal Effect of Approval
“Section 31(1) of the IB Code provides for the legal effect of approval of the Resolution Plan. If the Adjudicating Authority is satisfied that the resolution plan as approved by the committee of creditors… it shall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors…”
4. Paragraph 8: Extinguishment of Claims
“In view of the declaration of law made by this Court, all the dues including the statutory dues owed to the Central Government, if not a part of the Resolution Plan, shall stand extinguished and no proceedings could be continued in respect of such dues for the period prior to the date on which the adjudicating authority grants its approval under Section 31 of the IB Code.”
5. Paragraph 9: Criticism of NCLAT’s Decision
“The decision of this Court in the case of Ghanashyam Mishra and Sons Pvt. Ltd. Was specifically relied upon before the NCLAT. The decision of this Court was brushed aside by the NCLAT… The reason given by NCLAT that the decision of this Court cannot be considered as it was not cited before the NCLT is perverse.”
6. Paragraph 14: Final Ruling
“We, therefore, hold that the demands raised by the first respondent against the CD in respect of assessment years 2012-13 and 2013-14 are invalid and cannot be enforced. We set aside the impugned orders of NCLT and NCLAT and allow the appeal accordingly.”
Judgments Cited or Relied
1. Ghanashyam Mishra and Sons Pvt. Ltd. V. Edelweiss Asset Reconstruction Company Ltd – Citation: (2020) 8 SCC 531 – This case was referenced regarding the legal effect of the approval of the Resolution Plan and the extinguishment of claims not included in the plan.
2. Committee of Creditors of Essar Steel India Ltd. V. Satish Kumar Gupta & Ors – Citation: (2021) 9 SCC 657 – This case was cited to support the argument regarding the implications of claims that may exist apart from those decided on merits by the resolution professional and the Adjudicating Authority/Appellate Tribunal.
Acts and Sections Involved in the Judgment
1. Insolvency and Bankruptcy Code, 2016 (IB Code) – Section 31: This section outlines the legal effect of the approval of a Resolution Plan, stating that once approved, the plan is binding on the corporate debtor and its stakeholders, and claims not included in the plan are extinguished.
2. Income Tax Act, 1961 – Section 154: This section pertains to the rectification of mistakes in assessment orders, which was relevant to the income tax liability discussed in the case.
Party
Vaibhav Goel & Anr. V. Deputy Commissioner of Income Tax, Civil Appeal No. 49 of 2022, with the citation being reported in the Supreme Court of India, and the judgment was delivered on March 20, 2025, by Justices Abhay S. Oka and Ujjal Bhuyan.
