National Plywood Industries Ltd. v. Union of India / the Commissioner Central Goods And Service Tax, Dibrugarh
[Citation -2020-LL-0217-82]

Citation 2020-LL-0217-82
Appellant Name National Plywood Industries Ltd.
Respondent Name Union of India / the Commissioner Central Goods And Service Tax, Dibrugarh
Court HIGH COURT OF GAUHATI
Relevant Act CGST
Date of Order 17/02/2020
Judgment View Judgment
Keyword Tags insolvency and bankruptcy code • national company law tribunal • beneficial interest • central excise • service tax • penalty


Page No.# 1/5 GAHC010032722020 GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) Case No. : WP(C) 1059/2020 1:NATIONAL PLYWOOD INDUSTRIES LTD. REGD. OFFICE AT MAKUM PATHAR, MARGHERITA, PIN- 786187, DIST.- TINSUKIA, ASSAM AND HEAD OFFICE AT 5, FANCY LANE, KOLKATA, REP. BY ITS AUTHORISED SIGNATORY, SRI RAJ KUMAR BAJAJ, AGE- 66 YEARS. VERSUS 1:UNION OF INDIA AND ANR. REP. BY MINISTRY OF FINANCE, NORTH BLOCK, NEW DELHI-110001. 2:THE COMMISSIONER CENTRAL GOODS AND SERVICE TAX DIBRUGARH MILAN NAGAR LANE F P.O. C.R. BUILDING DIBRUGARH- 786003 DIST.- DIBRUGARH ASSAM Advocate for Petitioner : MR. M KATAKI Advocate for Respondent : ASSTT.S.G.I. Page No.# 2/5 BEFORE HONOURABLE MR. JUSTICE ACHINTYA MALLA BUJOR BARUA Date : 17-02-2020 JUDGMENT AND ORDER(ORAL) Heard Mr. M Kataki, learned counsel for petitioner and Mr. SC Keyal, learned ASGI appearing for Union of India. 2. order dated 15.11.2019 of Commissioner, GST, Dibrugarh is assailed in this writ petition. By said order, requirement for payment of Rs.1,82,67,651/- on petitioner M/S National Plywood Industries Limited was confirmed and further penalty of Rs.1,82,67,581/- was imposed under Rule 173Q (1) of Central Excise Rules, 1944. said order dated 15.11.2019 has been assailed by stating that petitioner has been held to be corporate debtor as per order dated 26.08.2019 of National Company Law Tribunal, Guwahati and accordingly order of moratorium had been passed under Section 13 of Insolvency and Bankruptcy Code, 2016. 3. Mr. SC Keyal, learned ASGI refers to paragraph 3.2 of order of Commissioner dated 15.11.2019 which is extracted as under: 3.2 I find that Hon ble National Company Law Tribunal, Guwahati Bench had passed order dated 26.08.2019 in respect of bankruptcy case of assessee wherein they are liable to certain debt to financial creditor and their properties are also controlled for debt including any action under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. By virtue of order dated 26.08.2019, Hon ble National Company Law Tribunal has declared Moratorium under insolvency & bankruptcy code-2016 in terms of Section 14 of said code vide which proceedings against corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority was prohibited. Now, question arises whether adjudication Page No.# 3/5 of Show cause notices would mean execution order or be treated as decree against them. I find that adjudication means determination of liability against any assessee to whom show cause notices have been served and in instant case also there is no bar of tax authority to carry out exercise of adjudication process for determining liability of assessee towards department. 4. By relying on view taken by Commissioner, Mr. Keyal submits that said objection raised by petitioner as regards order of moratorium passed by National Company Law Tribunal had been taken care of by Commissioner in its order. 5. We have perused order of Commissioner in paragraph 3.2 of order dated 15.11.2019. Commissioner takes view that by order dated 26.08.2019, National Company Law Tribunal has declared moratorium under Section 14 (Section 13) of Insolvency and Bankruptcy Code, 2016 against corporate debtor in respect of execution of any judgment and decree or order of any court of law, tribunal, arbitration panel or other authority. Accordingly, in order of Commissioner question was raised whether issuance of show cause notice by GST authorities would mean to be execution of order or it be treated as decree against petitioner. By raising such question, objection that further proceeding is not maintainable because of order of moratorium of National Company Law Tribunal was overruled. 6. Section 14 (1) of Insolvency and Bankruptcy Code, 2016 is as follows: 14. Moratorium- (1) Subject to provisions of sub-sections (2) and (3), on insolvency commencement date, Adjudicating Authority shall by order declare moratorium for prohibiting all of following, namely:- (a) institution of suits or continuation of pending suits or proceedings against corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing off by corporate debtor any Page No.# 4/5 of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by corporate debtor in respect of its property including any action under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); (d) recovery of any property by owner or lessor where such property is occupied by or in possession of corporate debtor. 7. Section 14 (1) (a) provides that on insolvency commencement date, adjudicating authority shall by order declare moratorium for prohibiting, amongst others, institution of suits or continuation of pending suits or proceeding against corporate debtor, including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority. 8. Section 14-(1) (a), amongst others, refers to institution of suits or continuation of pending suits or proceeding, which also includes execution of any judgment and decree or order of any court of law, tribunal, arbitration panel or other authority. dominant provision of section 14-(1) (a) being institution of suits or continuation of pending suits or proceedings, it is not necessary that only execution of judgment and decree or order of any court of law, tribunal, arbitration panel or other authority, is prohibited under Section 14 (1) (a). other provision as regards institution of suits or continuation of pending suits or proceedings being provision of Section 14 (1) (a), in plain reading of Section 14- 1(a) would also have to be prohibited. 9. From order dated 15.1.2019, it is discernible that aspect as to whether pending proceeding before GST authority is also proceeding as provided in Section 14- (1) (a) has not been examined by Commissioner of GST and consequently implication thereof i.e. if it is proceeding whether order of moratorium would also cover said proceeding, has also not been looked into. 10. Accordingly, order dated 15.11.2019 is hereby set aside and matter is Page No.# 5/5 remanded back for fresh consideration by examining aspect as to whether order of moratorium of National Company Law Tribunal also covers proceeding pending before GST authorities under GST Act 2017. 11. required consideration be made within period of one month from date of receipt of certified copy of this order. 12. writ petition stands disposed of. JUDGE Comparing Assistant National Plywood Industries Ltd. v. Union of India / Commissioner Central Goods And Service Tax, Dibrugarh
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