NCLT Disposes Sales Tax Department’s Secured Creditor Claim Application as Infructuous

The State Tax Officer-3 filed an application before the National Company Law Tribunal, Ahmedabad Bench, against Gujarat Foils Ltd. and its liquidator under Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016. The department argued that its outstanding tax dues for several assessment years should be treated as secured debt, relying on the Supreme Court ruling in State Tax Officer v. Rainbow Papers Limited.

During the proceedings, M/s OFB Tech Private Limited, the successful bidder for the corporate debtor, was also added as a party. It was also noted that some tax disputes were still pending before appellate authorities for verification of documents.

Main Issue: Whether the tax department’s request to be recognized as a secured creditor and its claim over the corporate debtor’s assets required adjudication in this application.

Tribunal Decided: The National Company Law Tribunal closed the application as infructuous. The Tribunal observed that the issues raised by the State Tax Officer had already been dealt with in a related matter IA No. 497 of 2020 where orders addressing the department’s claims had been passed.

Since the key questions were already considered in that parallel proceeding, the Tribunal held that there was no need to examine the same issues again in this application. Thus, application was disposed of without further discussion on the merits of the claim.

To Read Full Order, Download PDF Given Below