The Hon'ble NCLT, Chennai in the matter of T.R. Ravichandran, RP vs. The Asst. Commissioner (ST) &Ors. [MA/1298/2019 in IBA/130/2019 decided on December 12, 2019] directed the Asst. Commissioner (ST) &Ors. ('Respondents') to allow Corporate Debtor to have access to its GST Portal account, permit the Applicant to file GST Return of Corporate Debtor generated after commencement of CIRP before clearing past dues.
Facts:
T.R. Ravicandran ('Applicant'), a Resolution Professional ('RP') of M/s Kiran Global Chem Limited ('the Company' or 'Corporate Debtor') filed an MA seeking permission to Corporate Debtor to have access to the its GST Portal account to file GST Return during the period of Corporate Insolvency Resolution Process ('CIRP') and to allow the Applicant to pay the net GST liability from the date of commencement of CIRP till its completion disregarding non-payment of arrears dues of GST for the period prior to commencement of CIRP.
Issue involved:
Whether access of GST Portal can be given to Corporate Debtor to file GST Return during the period of CIRP.
Held:
The Hon'ble NCLT, Chennai in MA/1298/2019 in IBA/130/2019 decided on December 12, 2019 held as under:
• Any company once gone into CIRP, if at all the Corporate Debtor is to be run as a going concern, it can be obligated to pay the taxes from the date of initiation of CIRP. As to the dues of pre-admission period, the creditors, including Tax authorities, are entitled to make a claim against the Corporate Debtor as mentioned in the Insolvency and Bankruptcy Code, 2016 ('IBC').
• Therefore, if Corporate Debtor's GST Portal is blocked, it is difficult for the Corporate Debtor to generate bills falling within the ambit of GST and pay the taxes for the post-admission period.
• Law is clear that the Tax authorities fall within the ambit of the Operational Creditor, as to the pre-admissioned claims are concerned, they are at liberty to make their claims before the RP instead of insisting upon the RP to pay the same before accepting the tax liabilities arising during the CIRP period.
• Rejected the Contention of the Respondents that there is no Section in Central Goods and Services Act, 2017 ('CGST Act') or in its software to accept current dues before clearing part dues stating that as per Section 238 of the IBC states that IBC will have overriding effect on all other laws which are in contravention to the provisions of IBC.
• Directed the Respondents to allow Corporate Debtor to have access to its GST Portal account, permit the Applicant to file GST Return of Corporate Debtor generated after commencement of CIRP without insisting upon the payment of past dues of GST during the pre-admission period and accept net GST liability after availing eligible ITC from the date of commencement of CIRP and adjust such GST payment so remitted by the Corporate Debtor towards discharge of GST during the CIRP period.
Relevant provision:
Section 49 (8) of the CGST Act
'49. Payment of tax, interest, penalty and other amounts.
(8) Every taxable person shall discharge his tax and other dues under this Act or the rules made thereunder in the following order, namely:-
(a) self-assessed tax, and other dues related to returns of previous tax periods;
(b) self-assessed tax, and other dues related to the return of the current tax period;
(c) any other amount payable under this Act or the rules made thereunder including the demand determined under section 73 or section 74;"
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