NCLAT: Revision of GST assessment is beyond the jurisdiction of RP, not sustainable in law

By:

In Bijoy Prabhakaran Pulipra v. State Tax Officer, SGST [Company Appeal (AT) (CH)(Insolvency) No. 42 of 2021 dated October 07, 2021], Bijoy Pulipra (“the Appellant”) filed an appeal impugning Order dated January 28, 2021 passed by the National Company Law Tribunal (“NCLT”), Kochi Bench in MA/205/KOB/2020 in MA/140/KOB/2020 in TIBA/11/KOB/2019. Wherein, the NCLT had passed an order under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (“IBC”) holding that there is no error in the Order in MA/140/KOB/2020. The Appellant therefore, sought clarification on the same from the National Company Law Appellate Tribunal (“NCLAT”), Chennai.

NCLAT dismissed the appeal filed by the Appellant seeking clarification about assessment of GST amount payable by Corporate Debtor. The NCLAT held that the Resolution Professional (“RP”) committed an error in exercising their power and exercised the powers of GST Authorities, by way of Regulation 14 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”), which was not held to be sustainable.

NCLAT noted that the Appellant revised the admitted claim of GST dues filed by The State Tax Officer, SGST (“the Respondent”) after verification of the GST claims with Corporate Debtor’s books. On account of this, the NCLAT remarked that the revision of the GST assessment order was beyond the jurisdiction of the RP and the RP was not having the adjudicatory power given by the GST Law

Regulation 14 of the CIRP Regulations only authorizes the RP to exercise power where the claim is not precise due to any contingency or other reasons. The NCLAT observed that the GST amount is an amount of tax levied under the assessment order as per GST Law and the same cannot be edited or reduced by RP himself, and even if the RP was aggrieved by the said order, they should have filed the appeal under Central Goods and Services Tax Act, 2017 (“CGST Act”)/State Goods and Services Tax Act, 2017 (“SGST Act”).

The NCLAT further stated that any revision of assessment orders also cannot be made under the pretext of Section 238 of IBC. Section 238 of IBC cannot be read as conferring any appellate or adjudicatory jurisdiction in respect of issues arising under other statutes.

Lastly, the NCLAT stated that Committee of Creditors (“COC”) cannot exercise judicial power under commercial wisdom and has no role in acceptance/rejection of claim, the NCLAT concluded that the NCLT had rightly considered the statutory provision and suggested filing an Appeal before NCLAT. Furthermore, the said act of the RP is without jurisdiction and not sustainable in law.

Online GST Course by Bimal Jain

Recorded: Certified Advanced GST Course

Course Details: Certificate of Participation will be Provided, Free GST Updates on E-mail, WhatsApp, Telegram for 1 Year, Background Material and PPT will be Provided on the downloadable basis, Total 21 Recorded Sessions (60 Hours), will be available for 120 hours or 60 Days whichever expires earlier.

For Registration:- https://cutt.ly/hxjl5Cu

Recorded: GST Course on Exports, Deemed Exports, SEZ, Imports, Merchandise Exports, Inverted Duty Structure (including Refunds)

Course Details: 6 Online Recorded Sessions of 2.30Hrs each with Background Material (BGM)

For Registration:- https://cutt.ly/pvw7mzl

For more details, Call: +91-8076563802, E-mail: intern@a2ztaxcorp.com, Web: www.a2ztaxcorp.in

DISCLAIMER: The views expressed are strictly of the author and A2Z Taxcorp LLP. The contents of this article are solely for informational purpose and for the reader’s personal non-commercial use. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon. Further, no portion of our article or newsletter should be used for any purpose(s) unless authorized in writing and we reserve a legal right for any infringement on usage of our article or newsletter without prior permission.

CLOSE
CLOSE