GST Demand Barred After NCLT Plan Approval | HC

Case Details: Srei Equipment Finance Ltd vs. State of UP - [2025] 176 taxmann.com 582 (Allahabad)

Judiciary and Counsel Details

• Shekhar B. Saraf and Praveen Kumar Giri
• Rahul Agarwal for the Petitioner.
  Sri Nimai Das, learned Additional Chief Standing Counsel for the Respondent.

The petitioner-assessee, which had entered the Corporate Insolvency Resolution Process (CIRP), approached the High Court challenging an assessment order passed under section 73 of the CGST Act and the Uttar Pradesh GST Act as well as a show cause notice issued under the same provision. During the CIRP, the Resolution Professional had specifically notified the GST Department of the ongoing proceedings. Despite this, the jurisdictional officer proceeded to pass the assessment order and issue a separate show cause notice.
The petitioner contended that once a resolution plan had been approved by the National Company Law Tribunal (NCLT) and affirmed by the National Company Law Appellate Tribunal (NCLAT), the GST Department was barred from creating further demands through adjudication proceedings. The matter was accordingly placed before the Allahabad High Court.

HC Held

The Allahabad High Court held that the Supreme Court had categorically held that once a resolution plan had been approved by the NCLT, all other creditors were barred from raising their claims subsequently, as the same would disrupt the entire resolution process. Accordingly, the impugned assessment order passed under section 73 of the CGST Act and Uttar Pradesh GST Act as well as the impugned show cause notice issued under the same provision, were to be quashed.

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