CESTAT said that in the absence of any guidelines, the departmental representatives are unaware as to what stand to be taken in cases which are in bankruptcy court or appellate body.
The Tribunal noted that the IBC overrides other laws and determined that recovery proceedings, including tax recovery, cannot be initiated after the company has been admitted for debt resolution under the Bankruptcy Code.
the bench saw that Revenue Department did not have any proper guidelines as to what stand to be taken in the case where the IBC proceedings were earlier National Company Law Tribunal or appellate body.
A Bench of Judicial Member Ramesh Nair said, “We are of the view that the Central Board of Indirect Taxes and Customs may consider issuing guidelines/procedure to deal with the matter before this Tribunal in which the IBC proceedings were initiated by the company of the assessee.” Is.” And technical member Raju said last week.
The decision was on a case where the revenue department raised the demand for tax. UltraTech CementFollowing your plan to acquire Binani CementAn insolvent company, was approved by NCLT.
UltraTech submitted that as per the resolution plan approved by NCLT, there were no arrears against the applicant and hence, the tax demand by the Revenue Department was not recoverable.
However, CESTAT observed that even though the IBC had an overriding effect over all other Acts, “in the absence of any explicit provision under the Customs/Central Excise Act, this Tribunal cannot ultimately decide that The prescribed amount may or may not be recovered. or otherwise”.