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Tax & Customs LawSupreme Court of India

Vaibhav Goel & Anr. v. Deputy Commissioner of Income Tax & Anr.

Civil Appeal · 2025 INSC 375Decided 20 Mar 2025
C.A. No.-000049 - 2022
Justice Abhay S. Oka · Justice Ujjal Bhuyan

Background

The appellants were the successful Resolution Applicants whose plan to take over the insolvent company Tehri Iron and Steel Casting Ltd. was approved by the National Company Law Tribunal (NCLT) in May 2019; the plan listed a contingent income-tax liability for one assessment year (2014-15) but nothing for two other years. After the plan was approved, the Income Tax Department raised fresh demands for those other two assessment years (2012-13 and 2013-14), which had never been submitted as claims during the resolution process. Both the NCLT and the National Company Law Appellate Tribunal (NCLAT) rejected the appellants' challenge to these new demands.

Decision Breakdown

The Supreme Court relied on its own binding precedent (Ghanashyam Mishra and Sons) holding that once a resolution plan is approved, all claims, including statutory dues owed to the government, that are not part of that plan stand permanently extinguished, and no proceedings can be brought for such dues relating to the period before approval. Since the tax demands for 2012-13 and 2013-14 were never claimed before the Resolution Professional, they could not be revived afterward. The Court also criticised the NCLAT for brushing aside this binding precedent on technical grounds and criticised the NCLT for imposing costs without giving reasons. It set aside both the NCLT and NCLAT orders and allowed the appeal.

Lesson Learnt

Once a company's insolvency resolution plan is approved by the tribunal, creditors, including tax authorities, lose the right to raise any dues from before that approval that they did not formally claim during the process; a new owner takes the company over on a "clean slate."

Vaibhav Goel & Anr. v. Deputy Commissioner of Income Tax & Anr. – Legal Case Shots | LegalAware