GVAT Dues Are Secured | GST/CST Not Under IBC—NCLT

Case Details: State Tax Officer v. Vinod Tarachnad Agrawal - [2025] 174 taxmann.com 1211 (NCLT-Ahd.)

Judiciary and Counsel Details

• Shammi Khan, Judicial Member & Sanjeev Kumar Sharma, Technical Member
• Ms Ritu Guru, Adv. for the Appellant.
• Jaimin Dave & Ravi Pahwa, Advs. for the Respondent.

Facts of the Case

In the instant case, the corporate debtor had failed to pay tax dues under GVAT Act, 2003, CST Act, 1956 and GST Act, 2017. The applicant-State Tax Officer filed an instant application seeking direction to Resolution Professional to consider claim of applicant as ‘secured creditor’ and make payment of claim as it were to be made as per section 53(1)(b)(ii) of the IBC.

It was noted that the unpaid GVAT dues by the corporate debtor were to be treated as debts owed to a secured creditor under section 53(1)(b)(ii), and authority was to be considered as ‘secured creditor’ and the provisions of section 53 of the IBC were to be adhered to.

The NCLT observed that the unpaid CST dues as well as unpaid GST dues by the corporate debtor to State were not dues owed to a secured creditor, and provisions of section 53(1)(b)(ii) of the IBC did not apply.

NCLT Held

The NCLT held that these dues did not qualify as secured creditor claims, as no statutory charge akin to section 48 of the GVAT Act existed under the GST Act, 2017. Therefore, the applicant’s claim was partly accepted and GVAT dues were admitted as secured creditor claims, while CST dues as well as GST dues were admitted as government dues under section 53(1)(e)(i) of the IBC and not as secured creditor claims.

List of Cases Referred to

• Paschimanchal Vidyut Vitran Nigam Ltd. v. Raman Ispat (P.) Ltd. [2023] 152 taxmann.com 421/180 SCL 30 (SC) (para 2)
• State Tax Officer v. Rainbow Papers Limited [2022] 142 taxmann.com 157/174 SCL 250 (SC) (para 2)
• Sanjay Kumar Agarwal v. State Tax Officer [2023] 156 taxmann.com 69/[2024] 181 SCL 340 (SC) (para 18).