Case Details
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Court: High Court of Judicature at Allahabad
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Case No.: Writ Tax No. 155 of 2024
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Petitioner: Srei Equipment Finance Ltd.
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Respondent: State of Uttar Pradesh & Others
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Date of Judgment: 09 July 2025
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Bench: Hon’ble Shekhar B. Saraf, J. and Hon’ble Praveen Kumar Giri, J.
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Category of Dispute: Demand under Section 73 of CGST/UPGST Act vis-à-vis approved Resolution Plan under IBC
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Relevant Sections: Section 73 of CGST/UPGST Act, 2017; Section 31 of IBC, 2016; Moratorium under Section 14 of IBC
Facts of the Case (Paras 2–4)
The petitioner company had undergone Corporate Insolvency Resolution Process (CIRP) commencing on 08 October 2021. During the CIRP, creditors including the GST Department were invited to submit claims. The Resolution Plan was approved by NCLT on 11 August 2023 and affirmed by NCLAT on 05 January 2024. Despite this, the Joint Commissioner, Corporate Circle, Meerut passed an order under Section 73 of UPGST Act on 26 December 2023 for tax period 2017-18 and further issued a show-cause notice dated 15 January 2024 for 2018-19, creating fresh liabilities against the petitioner.
Questions before the Court
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Whether the GST Department could raise fresh demands for past periods once a Resolution Plan under IBC had been approved by NCLT/NCLAT?
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Whether such proceedings under Section 73 of CGST/UPGST Act were legally sustainable post-approval of the Resolution Plan?
Observations of the Court (Paras 5–7)
The Court noted that once a Resolution Plan is approved under Section 31 of IBC, no creditor, including statutory authorities, can raise fresh claims not forming part of the approved plan. Reliance was placed on:
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Ghanshyam Mishra and Sons v. Edelweiss ARC (SC, 2021) – All claims not part of Resolution Plan stand extinguished.
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NS Papers Ltd. v. Union of India (Allahabad HC, 2024) – Pending or belated assessments post-Resolution Plan approval cannot saddle the resolution applicant with unknown liabilities.
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Vaibhav Goyal v. DCIT (SC, 2025) – Dues not included in Resolution Plan are extinguished and cannot be enforced; resolution applicant must restart business on a clean slate.
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CoC of Essar Steel v. Satish Kumar Gupta (SC, 2019) – Successful resolution applicant cannot be burdened with undecided or belated claims.
The Court emphasized that allowing fresh demands would defeat the moratorium, frustrate IBC objectives, and create an “anathema to the fundamental principle of fresh start.”
Judgment / Verdict (Paras 8–9)
The High Court held that GST proceedings initiated after approval of the Resolution Plan were unsustainable. Accordingly:
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The assessment order dated 26 December 2023 under Section 73 of UPGST Act for FY 2017-18 was quashed.
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The show-cause notice dated 15 January 2024 for FY 2018-19 was also quashed.
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Writ petition was allowed.
Table of Cases Referred
| Case | Court & Year | Verdict / Ratio |
|---|---|---|
| Ghanshyam Mishra and Sons v. Edelweiss ARC | Supreme Court, 2021 | All claims not forming part of Resolution Plan stand extinguished. |
| NS Papers Ltd. v. Union of India | Allahabad HC, 2024 | Fresh or pending assessments post-Resolution Plan approval are barred. |
| Vaibhav Goyal v. DCIT | Supreme Court, 2025 | Statutory dues not part of the Resolution Plan stand extinguished; resolution applicant must get clean slate. |
| CoC of Essar Steel v. Satish Kumar Gupta | Supreme Court, 2019 | Resolution applicant cannot face undecided or belated claims after plan approval. |
Between Fine Lines
For businesses, this ruling reinforces that once a Resolution Plan under IBC is approved, no fresh GST or income-tax demands can be raised for past periods. Authorities must file their claims during CIRP; otherwise, they stand extinguished. Resolution applicants can thus take over companies without fear of unexpected statutory liabilities.
Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”
