Gujarat High Court
Gsl Nova Petrochemicals Limited vs The Deputy Commissioner Of Income Tax, … on 17 April, 2026
Author: A.S. Supehia
Bench: A.S. Supehia
NEUTRAL CITATION
C/SCA/10531/2023 JUDGMENT DATED: 17/04/2026
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 10531 of 2023
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
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Approved for Reporting Yes
No
✔
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GSL NOVA PETROCHEMICALS LIMITED
Versus
THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2(1)(1), AHMEDABAD
==================================================
Appearance:
MR TUSHAR HEMANI SENIOR ADVOCATE with MS VAIBHAVI K PARIKH(3238)
for the Petitioner(s) No. 1
DEV D PATEL(8264) for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 17/04/2026
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE PRANAV TRIVEDI)
1. Heard learned Senior Advocate Mr. Tushar Hemani assisted by
learned advocate Ms. Vaibhavi Parikh for the petitioner and learned Senior
Standing Counsel Mr. Dev Patel for the respondent.
2. With the consent of the learned advocates for the respective parties,
the matter is taken up for hearing, as the issue involved is very short.
3. The petition has been filed under Article 226 of the Constitution of
India with the following prayers :-
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“(a) Quash and set aside the impugned notice as well as impugned
order at Annexure-“A (Colly.)” to this petition;
(b) Pending the admission, hearing and final disposal of this petition,
stay the implementation and operation of the impugned notice as
well as impugned order at Annexure-“A (Colly.)” to this petition and
stay further proceedings for Assessment Year 2019-20;
(c) Any other and further relief deemed just and proper by granted
in the interest of justice;
(d) To provide for the cost of petition.”
4. The brief facts of the case are as follows:
4.1. The petitioner is a company registered under the Companies Act,
1956. The petitioner had filed the return of income under the provisions of
the Income Tax Act, 1961 (for short “the Act”) for the Assessment Year
2019-20.
4.2. The case of the petitioner qua Assessment Year 2019-20 was
proposed to be reopened by the issuance of a notice dated 28.02.2023
under clause (b) of Section 148A of the Act.
4.3. The petitioner was subjected to the insolvency proceedings under
the Insolvency and Bankruptcy Code, 2016 (“IBC”), wherein, a Corporate
Insolvency Resolution Process (“CIRP”) was initiated under Section 7 of
the IBC, which was admitted by the Adjudicating Authority vide order
dated 05.10.2021.
4.4. An Interim Resolution Professional was appointed by the National
Company Law Tribunal (for short “Tribunal”), who made a public
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NEUTRAL CITATIONC/SCA/10531/2023 JUDGMENT DATED: 17/04/2026
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announcement in accordance with Section 13, 15 and other relevant
provisions of the IBC read with the Regulation 6 of the Bankruptcy Board
of India (Insolvency Process of Corporate Persons) Regulations, 2016, (For
short “Regulations, 2016”) thereby inviting claims from the various
creditors of the petitioner.
4.5. Further, under the CIRP, the Resolution Plan of GSL Nova
Petrochemicals Ltd., for the revival of the petitioner was approved by the
Tribunal vide order dated 05.10.2021 under Section 30(6) of the IBC. The
said Resolution Plan provided for the waiver and extinguishment of all the
unassessed/assessed tax liabilities for the period prior to the Tribunal
approval date.
4.6. The respondent has issued the impugned notice dated 28.02.2023,
under clause (b) of Section 148A of the Act.
4.7. Challenging the legality of the impugned notice dated 28.02.2023
under clause (b) of Section 148A of the Act and impugned order dated
29.03.2023 passed under Section 148A(d) of the Act, the petitioner has
filed this petition.
5. Learned Senior Advocate Mr. Tushar Hemani assisted by learned
advocate Ms. Vaibhavi Parikh appearing on behalf of the petitioner
submitted that on the approval of the Resolution Plan under Section 31 of
the IBC, all dues of the Corporate Debtor except those which have been
specifically provided for in the Resolution Plan would stand extinguished in
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terms of the provisions of the IBC and the decisions of the Hon’ble Apex
Court in the case of Committee of Creditors of Essar Steel India Ltd.
Through Authorised Signatory Vs. Satishkumar Gupta reported in (2020) 8
SCC 531 and in case of Ghanshyam Mishra and Sons Pvt. Ltd. Vs.
Edelweiss Asset Reconstruction Company Ltd. through the Directors &
Ors., reported in (2021) 9 SCC 657. Learned Senior Advocate Mr. Tushar
Hemani submitted that in the present case, the tax dues stand
extinguished in terms of the Resolution Plan.
5.1. Learned Senior Standing Counsel Mr. Dev Patel for the respondent-
Department is not in a position to controvert the position of law as far as
the extinguishment of the tax dues are concerned in terms of Section 31 of
the IBC. He however submits that in view of the said position, this Court
may not enter into the merits of the issuance of notice under Section 263
of the Act.
6. DISCUSSION & FINDINGS :-
6.1. A perusal of the Resolution Plan which came to be approved on
05.10.2021 by the Tribunal would reveal the following provisions as
evident from the relevant portion extracted below:-
“EFFECT OF THE RESOLUTION PLAN”
3.15. Tax Exemptions :
With the approval of Resolution Plan by the AA, it is assumed that
an exemption shall be deemed to have been granted to the
Corporate Debtor from the obligation to pay taxes in accordance
with the Finance Act, 2020.
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With the approval of this Resolution Plan by the Adjudicating
Authority, it is assumed that, reasonable opportunity of being
heard have been given to the jurisdictional Principal
Commissioner of Income Tax or Commissioner of Income Tax and
the Corporate Debtor shall be entitled to carry forward the
unabsorbed depreciation and accumulated losses under Income
Tax and minimum alternate tax and to utilize such amounts to set
off against future tax obligations.
xxx xxx xxx
Other Terms :
a. Approval of this plan shall be deemed approval of waiver from
filing of statutory returns (including but not limited to any filings
for registrar of Companies, Direct and Indirect Tax authorities,
plant related annual filings, etc.), for a period prior to Effective
Date. Certified copy of the order approving Resolution Plan shall
be a direction on such statutory authorities to allow GSL NOVA
PETROCHEMICALS LIMITED to do compliance(s) with effect
from and after the date of approval of Resolution Plan by the
Adjudicating Authority. All the prior non compliance(s) should be
adjudicated as complied.
b. Direction to authorities for providing key infrastructure
facilities and approvals like Consent to Establish, Consent to
Operate, Water approval, Railways approval, etc.c. Extinguishment and waiver of all dues to the Existing Promoter
group by Corporate Debtor including but not limited to any
Financial Debt owed to them. An order approving the Resolution
Plan shall be a deemed order upon approving the Resolution Plan
shall be a deemed order upon Financial Creditors to cancel all
pledge/lien/other encumbrances upon the issued share capital of
the Company to enable corporate action as envisaged in the
Resolution Plan.
d. The Balance sheet of the Company as on effective date
pursuant to approval of the Resolution Plan by the Adjudicating
Authority shall stand restructured in terms of the provision of the
approved resolution plan.
e. Resolution Plan has been made on the presumption that all the
Assets as disclosed in the Information Memorandum, Financial
Statements, Data Room and other documents is owned by the
company and that there is no lease or encumbrances on the samePage 5 of 9
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except as mentioned in the security mapping being part of the
Information Memorandum.
f. After submission of the Resolution Plan or approval of the plan
by the COC/ Adjudicating Authority, if the CIRP is stayed by any
court then if the stay is not vacated within a reasonable period
then the CoC would release any amount paid in terms of the
Resolution Plan to the Resolution Applicant after receiving
undertaking to the effect that the amount would again be
deposited without any interest after such stay is withdrawn or the
case is decided. Any non- compliance to the Resolution Plan in
such eventuality or other unforeseen external factor should not be
treated as non-performance by the Resolution Applicant for
forfeiture of payment made or invocation of performance
guarantee given under this Resolution Plan.
g. Resolution Applicant also reserves the right to review, rescind
or terminate any contract, agreement or understandings that have
been entered into by the GSL NOVA PETROCHEMICALS
LIMITED prior to the cut-off date. It is assumed that all the
material contracts been posted or made available to the resolution
applicant on or before the submission of this Resolution Plan and
it shall not be liable to pay any damages or charges or penalty for
any breach of all such contracts or agreements which has not
been provided before the submission of the Resolution Plan.
Prayer is being hereby made to the Adjudicating Authority for
passing necessary order with respect to the above clause while
approving the resolution plan placed before it.
h. Having said the above, each such amount / claim / liability, is a
“claim” and “debt” each as defined under the IBC and would
consequently qualify as “operational debt” (as defined under the
IBC) and therefore the full amount of such claims shall be deemed
to be owed and due as of the Insolvency Commencement Date,
and no payments is envisaged against such claim or debt.
Maximum envisaged amount for payment to the Financial and
Operational Claim stands at Rs. 0.15 Crores.
i. Any person (including the Existing or earlier Promoter Group)
that has provided any form of security for and on behalf of, and /
or in order to secure any obligations of the Company (whether by
way of hypothecation, pledge, mortgage, guarantee or otherwise)
shall not be entitled to exercise any subrogation rights in respect
of such arrangement and they shall have no rights or claims
against the Company. All obligations, Liabilities, claims or
proceedings against the Company in this regard shall be deemed
to be owed and due as of the Insolvency Commencement Date and
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shall immediately, irrevocably and unconditionally stand
extinguished, waived, withdrawn and abated on and from the
Closing Date.
j. The Company shall have no Liabilities towards the persons
currently classified as promoter or promoter group (including the
Existing Promoter Group), persons acting in concert with
promoters, holding companies, subsidiary companies, associate
companies, Group Companies and / or their respective Affiliates /
associates). However, it is clarified that all claims of the Company
against such related parties (and all Liabilities of such related
parties towards the Company) shall remain outstanding due and
payable to the resolution applicant in accordance with their
terms.
k. Any Liabilities, claims, demands, capital contributions or any
other form of financial commitment; including but not limited to
pledge of shares or any security interest created or provided,
whether guaranteed or contractually agreed in writing or
otherwise by the Company on behalf of or for its subsidiary
companies, associate companies, Group companies and/or their
respective Affiliates, shareholders/ associates; as the case may be,
which are in existence prior to the effective Date or at any time
thereafter, shall standing irrevocably and unconditionally waived
and extinguished.
l. Resolution Applicant further states that the plan demonstrates
that it addresses the cause of default, it is feasible and viable, it
has provisions for its effective implementation, it has provisions
for approvals required and the timeline for the same and that the
resolution applicant has the capability to implement the plan.”
7. From the perusal of the above, it is evident that all tax liabilities,
assessed and unassessed under the Income Tax Act, 1961 “shall stand
waived and extinguished”.
8. In case of Committee of Creditors of Essar Steel India Ltd.
(Supra),the Hon’ble Apex Court has held as under:-
“107. For the same reason, the impugned NCLAT judgment in
holding that claims that may exist apart from those decided on
merits by the resolution professional and by the AdjudicatingPage 7 of 9
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Authority/Appellate Tribunal can now be decided by an appropriate
forum in terms of Section 60(6) of the Code, also militates against
the rationale of Section 31 of the Code. A successful resolution
applicant cannot suddenly be faced with “undecided” claims after
the resolution plan submitted by him has been accepted as this
would amount to a hydra head popping up which would throw into
uncertainty amounts payable by a prospective resolution applicant
who would successfully take over the business of the corporate
debtor. All claims must be submitted to and decided by the
resolution professional so that a prospective resolution applicant
knows exactly what has to be paid in order that it may then take
over and run the business of the corporate debtor. This the
successful resolution applicant does on a fresh slate, as has been
pointed out by us hereinabove. For these reasons, NCLAT judgment
must also be set aside on this count.”
9. In the case of Edelweiss Asset Reconstruction Company Ltd.,
(Supra), the Hon’ble Apex Court has categorically held as under:-
“102.1 That once a resolution plan is duly approved by the
adjudicating authority under sub-section (1) of Section 31, the
claims as provided in the resolution plan shall stand frozen and will
be binding on the corporate debtor and its employees, members,
creditors, including the Central Government, any State Government
or any local authority, guarantors and other stakeholders. On the
date of approval of resolution plan by the adjudicating authority, all
such claims, which are not a part of resolution plan, shall stand
extinguished and no person will be entitled to initiate or continue
any proceedings in respect to a claim, which is not part of the
resolution plan.
102.2 The 2019 Amendment to Section 31 IBC is clarificatory and
declaratory in nature and therefore will be effective from the date
on which IBC has come into effect.
102.3 Consequently all the dues including the statutory dues owed
to the Central Government, any State Government or any local
authority, if not part of the resolution plan, shall stand extinguished
and no proceedings in respect of such dues for the period prior to
the date on which the adjudicating authority grants its approval
under Section 31 could be continued.
138 In the forgoing paragraph, we have held that the 2019
Amendment to Section 31 IBC is clarificatory and declaratory in
nature and therefore will have a retrospective operation. As such,
when the resolution plan is approved by NCLT, the claims, whichPage 8 of 9
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are not part of the resolution plan, shall stand extinguished and the
proceedings related thereto shall stand terminated. Since the
subject-matter of the petition are the proceedings which relate to
the claims of the respondents prior to the approval of the plan, the
same cannot be continued. Equally the claims, which are not part of
the resolution plan, shall stand extinguished.”
10. Therefore, applying the decisions of the Hon’ble Apex Court to the
facts of the present case, it is clear that on the complete extinguishment of
all tax liabilities of the Corporate Debtor upon the approval of the
Resolution Plan on 05.10.2021, there could be no occasion whatsoever for
the respondents to issue the impugned order under clause (d) of Section
148A of the Act on 28.02.2023 as well as notice under Section 148 of the
Act on 29.03.2023. In such view of the matter, the merits of the impugned
notice under clause (b) of Section 148A of the Act have become academic
and need not be ventured into by this Court.
11. Resultantly, the petition succeeds and the impugned notice under
Section 148 of the Act dated 29.03.2023 and impugned order dated
29.03.2023 under Section 148A(d) of the Act are hereby quashed and set
aside. Rule is made absolute to the aforesaid extent. No order as to costs.
(A. S. SUPEHIA, J)
(PRANAV TRIVEDI,J)
phalguni/12
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