NCLT Resolution Plan and GST Dues – Allahabad HC in Kay Pan Fragrance Case

Case Details: Kay Pan Fragrance (P) Ltd vs. State of U.P. - [2025] 177 taxmann.com 816 (Allahabad)

Judiciary and Counsel Details

• Shekhar B. Saraf & Praveen Kumar Giri, JJ.
• Zafar Ahmad Khan for the Petitioner
• Dhananjay Awasthi, CSC for the Respondent

Facts of the Case

The petitioner went into the Corporate Insolvency Resolution Process (CIRP), and a Resolution Professional was appointed on the same day. The creditors were asked to submit their claims before the Resolution Professional. Later, the Resolution Plan was approved by the National Company Law Tribunal (NCLT).The GST Department, however, passed an order for the impugned assessment year, demanding tax, interest and penalty. Aggrieved by the order, the petitioner filed a writ petition before the High Court of Allahabad.

High Court Held

The Court held that once the Resolution Plan had been approved by NCLT, the GST Department could not create further dues by passing orders. The resolution applicant could not be saddled with new claims once a resolution plan had been approved. Thus, the impugned Assessment Order was quashed.

List of Cases Reviewed

• Vaibhav Goyal v. Dy. CIT [Civil Appeal No. 49 of 2022, dated 20-3-2025](para 7), followed

List of Cases Referred to

• Arena Superstructures (P.) Ltd. v. Union of India [2025] 174 taxmann.com 226 (All) (para 4)
• N.S. Papers Ltd. v. Union of India [WRIT TAX No. 408 of 2021, dated 11-12-2024] (para 4)
• Ghanashyam Mishra & Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. [2021] 126 taxmann.com 132/166 SCL 237 (SC) (para 4)
• Vaibhav Goyal v. Dy. CIT [Civil Appeal No. 49 of 2022, dated 20-3-2025] (para 6).