Deputy Commissioner (Works Contract) vs. National Company Law Tribunal

Held

The High Court held that the NCLT exceeded its jurisdiction by declaring the assessment order void ab initio. While the IBC moratorium prohibits recovery actions, it does not prevent tax authorities from determining the quantum of tax liability. The NCLT has no power under the IBC to nullify an assessment order, a function reserved for appellate or constitutional courts.

Facts

During the Corporate Insolvency Resolution Process (CIRP) and subsequent liquidation of M/s Albana Engineering (India) Pvt. Ltd., the Kerala State Goods and Services Tax Department completed a KVAT assessment for 2015-16, determining a liability of Rs. 11.76 Crores. The Resolution Professional (RP) sought permission from the NCLT to appeal this assessment. However, the NCLT declared the assessment order void ab initio, citing a violation of the IBC moratorium.

Key Issues

The key legal issue was whether the National Company Law Tribunal (NCLT) has the power under Section 33(5) of the IBC to declare a tax assessment order void ab initio due to the moratorium, or if its jurisdiction is limited to allowing the Resolution Professional to challenge the assessment before the appropriate tax authorities.