Gujarat High Court
Mahan Energen Limited vs Deputy Commissioner Of Income Tax, Dcit … on 17 April, 2026
Author: A.S. Supehia
Bench: A.S. Supehia
NEUTRAL CITATION
C/SCA/14368/2024 JUDGMENT DATED: 17/04/2026
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 14368 of 2024
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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MAHAN ENERGEN LIMITED
Versus
DEPUTY COMMISSIONER OF INCOME TAX, DCIT CIRCLE 16(1), DELHI
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Appearance:
MR B S SOPARKAR(6851) for the Petitioner(s) No. 1
MS MAITHILI D MEHTA(3206) 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 advocate Mr. B. S. Soparkar for the petitioner and
learned Senior Standing Counsel Ms. Maithili Mehta 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 :-
“(a) Quash and set aside the impugned notice under Section 148A
(b) dated 22.03.2023 at Annexure-A1, Order passed under Section
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148A(d) dated 05.04.2023 at Annexure-A2, and consequential notice
under Section 148 dated 05.04.2023 at Annexure-A3 to this petition;
(b) Pending the admission, hearing and final disposal of this petition,
to stay the implementation and operation of the impugned notice
under Section 148 dated 05.04.2023 at Annexure-A3 to this petition
and consequent assessment proceedings;
(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
2016-17 on 16.03.2017 declaring income of Rs.1,73,790/-.
4.2. The case of the petitioner was selected for complete scrutiny and
the assessment was completed on 26.12.2018 accepting the returned
income. The case of the petitioner qua Assessment Year 2016-17 was
proposed to be reopened by the issuance of a notice dated 05.04.2023
under Section 148 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 01.11.2021.
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NEUTRAL CITATION
C/SCA/14368/2024 JUDGMENT DATED: 17/04/2026
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4.4. An Interim Resolution Professional was appointed by the National
Company Law Tribunal (for short “Tribunal”), who made a public
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 Adani Power
Limited for the revival of the petitioner was approved by the Tribunal vide
order dated 01.11.2021 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 05.04.2023,
under Section 148 of the Act.
4.7. Challenging the legality of the impugned notice dated 05.04.2023
under Section 148 of the Act and impugned order dated 05.04.2023 passed
under Section 148A(d) of the Act, the petitioner has filed this petition.
5. Learned advocate Mr B.S. Soparkar 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
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NEUTRAL CITATION
C/SCA/14368/2024 JUDGMENT DATED: 17/04/2026
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extinguished in 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 advocate Mr. Soparkar
submitted that in the present case, the tax dues stand extinguished in
terms of the Resolution Plan.
5.1. Learned Senior Standing Counsel Ms. Maithili Mehta 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.
6. DISCUSSION & FINDINGS :-
6.1. A perusal of the Resolution Plan which came to be approved on
01.11.2021 by the Tribunal would reveal the following provisions as
evident from the relevant portion extracted below:-
“EFFECT OF THE RESOLUTION PLAN”
Section 6 : Reliefs and Waivers:
Any reliefs requested to be granted by the NCLT to the
Resolution Applicant shall not be construed as conditionalities to
the implementation of this Resolution Plan. The Resolution
Applicant submits that, at the time of seeking approval from the
NCLT, the reliefs provided below shall be included, with such
modifications as may be considered necessary by the NCLT:
(i) On and from the NCLT Approval Date, by order of the
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NCLT sanctioning this Resolution Plan, a restraint on, and
prohibition of, all Adverse Actions shall be deemed to be
declared until the Effective Date;
(ii) On and from the NCLT Approval Date, by order of the
NCLT sanctioning this Resolution Plan, all counter-party(ies)
to the Company Contracts shall be deemed to have given
their approval for change in ownership of the Corporate
Debtor (as specified in this Resolution Plan) with effect from
the date of the Effective Date.
(iii) The Resolution Applicant considers the uninterrupted
supply of water and use of land in terms of the Articles of
Arrangement signed with Uttar Pradesh Jal Vidyut Nigam
Limited (UPJVNL”) on December 23, 2009 (“UPJVNL
Agreement”) for permission for use of land and water drawl,
to be critical to preserve the value of the Corporate Debtor
and to maintain its status as a going concern. Accordingly,
the UPJYNL Agreement shall renew for a period of 12
months from the Effective Date in terms of this Resolution
Plan and continue is full force and effect and shall remain
valid and binding against the Corporate Debtor and UPJVNL
(iv) On and from the NCLT Approval Date, by order of the
NCLT sanctioning this Resolution Plan, the Township Lease
Agreement dated May 16, 2011 entered with Trikaya
Township Limited shall be deemed to be terminated, with
such termination being effective from the NCLT Approval
Date. Any claims or liabilities arsing as a consequence of such
termination shall be deemed to be relinquished, cancelled and
written-off on the NCLT Approval Date.
(v) On and from the NCLT Approval Date, by order of the
NCLT sanctioning this Resolution Plan, all Related Party
contractual arrangements entered into by the Corporate
Debtor shall be deemed to be terminated, with such
termination being effective from the NCLT Approval Date,
Any claims or liabilities arising as a consequence of such
termination shall be deemed to be relinquished, cancelled and
written-off on the NCLT Approval Date.
(vi) As the Resolution Applicant is required to take over the
Corporate Debtor’s Business on a ‘going concern’ basis, all
consents, licenses, approvals, clearances, rights, entitlements,
benefits and privileges whether under law, contract, lease or
license, created in favour of the Corporate Debtor or to which
the Corporate Debtor is entitled or accustomed to, shallPage 5 of 9
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continue to remain valid, notwithstanding way provision to the
contrary in their terms, and provided that in case of consents,
licenses, approvals, rights, entitlements, benefits and
privileges that have expired or lapsed, notwithstanding that
they may have already lapsed or expired due to hay breach,
non-compliance or efflux of time, be deemed to continue
without disruption for the benefit of the Corporate Debtor, for
a period of 12 (twelve) months from the Effective Daw or such
other period no required under Applicable Law, Further, no
coercive actions shall be taken against Resolution Applicant or
Corporate Debtor post NCLT Approval Date towards lapse of
any consents, licenses, approvals, clearances etc, under the
Applicable Law during the CIRP Period.
(vii) The Resolution Applicant in the event of being declared
successful shall be given an exemption of three (3) years from
the Effective Date to correct, amend and remedy for (1) 100%
utilization of fly ash; (ii) CSR Expenses, as required under the
Environmental Clearance issued by the relevant Government
and Statutory Authorities.
(viii) The time period provided to Corporate Debtor to install
flue gas desulfurization system (FGD) for Unit 1 and Unit 2
shall be extended to 31 March 2023 and no coercive action be
taken against the Corporate Debtor or Resolution Applicant for
non- compliance during such period.
(ix) The Resolution Applicant and the Corporate shall be
deemed to have received a waiver from all actions,
Proceedings or penalties under any applicable Law for
any Non- Compliance, including in connection with any
prior transfer of assets, contracts of business by the
Corporate Debtor.
(x) All Assets whether leased or owned by the erstwhile
Promoters, other individuals, Related Parties or affiliates of
the erstwhile Promoters, which are integral to the operations
of the Project shall vest with the Corporate Debtor.
(xi) The implementation of the Resolution Plan by the
Resolution Applicant and any change in control occurring
pursuant thereto shall not impact or breach the validity of any
such agreements, contracts (including but not limited to PPAs
and FSAs) etc, to which the Corporate Debtor is a party in.
(xii) The Ministry of Environment and Forest to waive all past
non-compliances of the Corporate Debtor and an additionalPage 6 of 9
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period of 36 months from the Effective Date to be provided for
complying with all the emission norms for installation of FGD.
(xiii) All permits, clearances and necessary approvals for
transportation of coal by road which have been obtained by
the Corporate Debtor shall be extended for 36 months from
the Effective Date,
(xiv) Any stamp duty liabilities or Tax liability arising pursuant
to the transactions contemplated under this Resolution Plan
shall be exempted or waived off.
It is hereby clarified that the non-grant of any of the
aforementioned reliefs shall not be considered at modification of
any of the other terms contained in this Resolution Plan, which
shall continuo to have the binding effect in terms of this
Resolution 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 Adjudicating
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 judgmentPage 7 of 9
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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, which
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
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NEUTRAL CITATION
C/SCA/14368/2024 JUDGMENT DATED: 17/04/2026
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Resolution Plan on 01.11.2021, there could be no occasion whatsoever for
the respondents to issue the order under clause (d) of Section 148A of the
Act on 05.04.2023 as well as notice under Section 148 of the Act on
05.04.2023. In such view of the matter, the merits of the impugned notice
under Section 148 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 05.04.2023 and impugned order under
Section 148A(d) dated 05.04.2023 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/22
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