Appeal was filed by Commercial Tax Department, Government of Madhya Pradesh against the order having the grievance that the Appellant was treated as an unsecured creditor, the claim of the appellant was termed as unsecured debt and was not considered as secured debt under Section 30 of the Insolvency and bankruptcy Act ,2016.
The Appellant has solely relied upon a decision of the Hon’ble Supreme Court rendered in the case of State Tax Officer (1) Vs. Rainbow Papers Limited, Civil Appeal No. 1661 of 2020 contending that Section 48 of the Gujarat Value Added Tax Act, 2003 (GVAT Act) and Section 33 of the Madhya Pradesh Value Added Tax Act, 2002 (MPVAT Act) are pari materia.
However, the same was denied by the counsel of the successful Resolution Applicant and he further submitted that in the case of Department of State Tax Vs. Zicom Saas Pvt. Ltd., CA (AT) (Ins) No. 246 of 2022 decided on 07.02.2023, while dealing with Section 37 of the Maharashtra Value Added Tax Act, 2002 (MVAT Act) which was sought to be equated with Section 48 of the GVAT Act, this Court found that Section 37 of MVAT Act was subject to any provision regarding creation of first charge in any Central Act and was not akin to the provision of Section 48 of the GVAT Act and held that the decision in the case of Rainbow papers (Supra) is not applicable.
It is further submitted by Counsel for Respondent No. 2 that the decision in the case of Rainbow papers (Supra) has been held to be a decision in the facts of that case in a subsequent judgment by the Hon’ble Supreme Court in the case of Paschimanchal Vidyut Vitran Nigam Limited Vs. Rama Ispat Pvt. Ltd. & Ors. Civil appeal No. 7976 of 2019. It is further submitted that the decision in the case of Zicom Saas (Supra) was followed in the case of Department of State Tax Vs. D.S Kulkarni Developers 8 Ltd., CA (A) (Ins) No. 1284 of 2023 and Devarajan Raman Liquidator Vs Principal Commissioner Income Tax, CA (AT) (Ins) No. 977 of 2023.
Hon’ble NCLAT considering judgment in Commissioner of Income Tax Vs. KTC Tyres (India) Ltd. Civil Appeal No. 6257-6259 of 2004, and Zicom Saas Pvt. Ltd., CA (AT) (Ins) No. 246 of 2022 held that the Judgement of the Hon’ble Supreme Court in “Rainbow Paper Limited” relied by Learned Counsel for the Appellant is distinguishable. The Appellant having been treated as Operational Creditor allocation of amount in the Resolution Plan cannot be said to be in violation of Section 30 (2)(b). The Appeal is dismissed.: Commercial Tax Department vs. Teena Saraswat Pandey & Anr., NCLAT NEW DELHI