Unfiled pre-resolution GST dues extinguished; later tax proceedings against SREI quashed, Calcutta High Court rules

The petitioner, an NBFC undergoing CIRP from 8 October 2021, obtained approval of a resolution plan on 11 August 2023.

The GST authorities had not lodged a claim for the dues now in dispute during the CIRP, and the approved plan provided for extinguishment of pre-Effective Date claims except as specified in the plan.

In 2025, the authorities issued a show-cause-cum-demand notice for alleged excess IGST input tax credit in FY 2021–22; an order-in-original confirmed the demand, interest and penalty.

A separate notice in January 2026 demanded interest for delayed GSTR-3B returns for July and August 2021.

1. Whether GST dues relating to periods before approval of the resolution plan, which were not lodged during CIRP, stood extinguished under Section 31(1) of the IBC, barring later assessment or demand proceedings.

2. Whether the availability of an appellate remedy under Section 107 of the CGST Act precluded the High Court from exercising writ jurisdiction.

3. Whether the separate demand for interest for July and August 2021 could survive the resolution plan’s approval.

Section 31(1) of the Insolvency and Bankruptcy Code, 2016 (IBC), as amended, makes an approved resolution plan binding on the Central Government and authorities owed statutory dues; under Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., claims not forming part of the approved plan stand extinguished, and proceedings in respect of them cannot be initiated or continued.

Section 238 of the IBC gives the Code overriding effect over inconsistent laws.

Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta explains that resolution must provide a successful applicant with a fresh slate, free from undecided claims.

The Court distinguished Sundaresh Bhatt, Liquidator of ABG Shipyard v. CBIC: it concerned assessment during liquidation, where liabilities remained payable from the liquidation estate, rather than claims extinguished by an approved resolution plan.

The Court also applied the principle that an alternative remedy does not bar writ review where the authority acted without jurisdiction or contrary to binding law.

The disputed tax period preceded the plan’s approval, no GST claim had been lodged, and the plan extinguished pre-Effective Date government claims not provided for in it.

The Court therefore held that the demand was not merely unrecoverable: the claim itself had been extinguished, so the authorities could not initiate or continue Section 73 proceedings to determine it.

The authorities’ reliance on Sundaresh Bhatt failed because that case concerned the moratorium and distribution of subsisting liabilities in liquidation, not post-plan proceedings concerning extinguished claims.

The Court also found writ intervention appropriate because the material facts were admitted and the jurisdictional issue was governed by binding precedent; an appeal would serve no purpose.

It quashed the show-cause-cum-demand notice, the order-in-original, the DRC-01 and DRC-07 summaries, and the separate notice demanding interest for July and August 2021.

The writ petition was allowed, with no order as to costs.