Leave Petition Against HC Order on Tax Demand Set Aside Due to Approved Resolution Plan by AA not Entertained

Case Details: Tata Steel Ltd. v. State of Uttar Pradesh - [2023] 151 taxmann.com 438 (SC)

Judiciary and Counsel Details

• • M.R. Shah & C.T. Ravikumar, JJ.
  • K.V. Vishwanathan, Sr. Adv., Manik Ahluwalia, Ms Saravna Vasanta, Ms Akhila Nambiar, Rahul Sangwan, Advs. & Shravan Kumar Yammanur, AOR for the Petitioner.

Facts of the Case

In the instant case, the corporate debtor incurred huge loan liabilities and SBI, a lender bank, filed an application u/s 7 of the IBC against the corporate debtor and the same was admitted by the Adjudicating Authority (NCLT).

Later, the Resolution plan submitted by the petitioner ‘T’ was approved by the Committee of Creditors (CoC) and the Adjudicating Authority also approved the said resolution plan.

Subsequent to the approval of the resolution plan, certain tax liabilities were crystallized which resulted in recovery proceedings against the corporate debtor and Assessing Authority (Commercial Tax) passed an assessment order relating to Assessment Year 2016-17 and demand notices were issued.

Consequently, aggrieved with assessment orders, the petitioner filed a writ petition before the HC and submitted that said demands could not be recovered and unjust enrichment would not apply once the resolution plan had been sanctioned.

The HC while passing the impugned order set aside demands against the petitioner, however, left the issue of unjust enrichment open as it was neither issue before the Assessing Authority nor such disputed question of fact could be adjudicated in the writ petition.

Subsequently, the Petitioner filed an instant leave petition against the said order of the High Court. The Supreme Court observed that since the High Court left the question of unjust enrichment open and no final adjudication had taken place on the same, instant leave petitions could not be entertained and the same was to be dismissed.

Supreme Court Held

The Supreme Court held that however as and when the issue would be raised, it would be open for the petitioner to defend/oppose the same.

List of Cases Reviewed

• • SLP dismissed against Tata Steel Ltd. v. State of UP [2023] 151 taxmann.com 437 (All.) (para 3).