 |
|
The National Company Law Appellate Tribunal (NCLAT) has dismissed a tax claim filed by the state tax department against Reliance Communications, a debt-ridden telecommunications company. The NCLAT ruled that the claim, seeking Rs 6.10 crore, was filed after the initiation of the insolvency resolution process against Reliance Communications, violating the established legal framework. This decision marks a significant victory for creditors involved in the insolvency proceedings and underscores the importance of adhering to the legal timelines and processes in such cases.
The NCLAT's judgment stemmed from a petition filed by the state tax department, seeking to recover dues from Reliance Communications. However, the NCLAT upheld an earlier decision by the Mumbai bench of the National Company Law Tribunal (NCLT) that had rejected the tax department's claim. The NCLT had argued that the assessment for the claimed amount was made after the commencement of the Corporate Insolvency Resolution Process (CIRP) against Reliance Communications, rendering the claim invalid.
The CIRP against Reliance Communications was initiated on June 22, 2019. The state tax department had initially filed a claim for Rs 94.97 lakh on July 24, 2019, which was accepted by the NCLT. However, their subsequent demand for Rs 6.10 crore, based on an assessment order dated August 30, 2021, was rejected. The NCLT reasoned that this claim, filed on November 15, 2021, was made after the approval of the CIRP plan by the Committee of Creditors (CoC) of RCom on March 2, 2020. This delay, according to the NCLT, was unacceptable.
The NCLAT, in its ruling, agreed with the NCLT's rationale, stating that the delay in filing the second claim could not be condoned. The NCLAT upheld the NCLT's view that the tax department's claim was invalid because it was submitted after the approval of the CIRP plan, and therefore, could not be considered. This decision reinforces the importance of adhering to the established timelines and procedures during the insolvency resolution process.
The NCLAT's decision has significant implications for creditors involved in insolvency proceedings. It clarifies that claims filed after the approval of the CIRP plan are inadmissible, ensuring fairness and transparency in the distribution of assets during the insolvency process. This decision strengthens the legal framework surrounding corporate insolvency resolution, providing a clear guideline for stakeholders and promoting a more efficient and equitable resolution of financial distress.
Source: NCLAT dismisses tax claim against Reliance Communication filed after insolvency initiation