CWP-13626-2024 IN THE HIGH COURT OF PUNJAB AND HARYANA AT Drake & Scull Water & National Faceless Assessment Centre CORAM : HON’BLE MR. JUSTICE HON’BLE MS. JUSTICE LAPITA BANERJI Present : Mr. Kushan Mr. Nikhil Kohli, for the petitioner. Ms. Pridhi Sandhu, for the respondent DEEPAK SIBAL In 2016, (for short, “IBC Insolvency Resolution Process (CIRP) introduced. A National Company 03.12.2020. Through publication in newspapers, the public at large was also put to notice of the approval of the afore resolution plan. 2. Thereafter, a upon the petition (hereinafter referred to as “ year 2012-13, the petitioner was requir Rs.38,45,397/- demanded tax was 2024 (O&M) Sr. No.111 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP-13626 Date of Decision : Drake & Scull Water & Energy India Private Limited Versus National Faceless Assessment Centre HON’BLE MR. JUSTICE DEEPAK SIBAL HON’BLE MS. JUSTICE LAPITA BANERJI Mr. Kushank Garg, Advocate and Mr. Nikhil Kohli, Advocate, for the petitioner. Ms. Pridhi Sandhu, Standing Counsel for the respondent-Income Tax Department. *** DEEPAK SIBAL, J. (Oral) In the year 2018, under the Insolvency and Bankruptcy Code (for short, “IBC) the petitioner-Company underwent the Corporate nsolvency Resolution Process (CIRP) and on 30.10.2018 moratorium was resolution plan was then made ompany Law Tribunal, Chandigarh, (for short, “NCLT 03.12.2020. Through publication in newspapers, the public at large was also put to notice of the approval of the afore resolution plan. Thereafter, a notice of demand dated 30.03.2024 was served upon the petitioner under Section 156 of the (hereinafter referred to as “the Act”) through which 13, the petitioner was required to deposit -. The petitioner was further informed that in case demanded tax was not deposited, it would entail levy of IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 13626-2024 (O&M) Date of Decision : 08.04.2026 Energy India Private Limited …Petitioner …Respondent DEEPAK SIBAL HON’BLE MS. JUSTICE LAPITA BANERJI k Garg, Advocate and Standing Counsel, Income Tax Department. Insolvency and Bankruptcy Code ompany underwent the Corporate on 30.10.2018 moratorium was lan was then made which was approved by the Chandigarh, (for short, “NCLT”) on 03.12.2020. Through publication in newspapers, the public at large was also put to notice of the approval of the afore resolution plan. notice of demand dated 30.03.2024 was served er under Section 156 of the Income-Tax Act, 1961 through which, for the assessment ed to deposit tax dues amounting to . The petitioner was further informed that in case the it would entail levy of penalties etc. VANDANA 2026.04.10 16:59 I attest to the accuracy and integrity of this document CWP-13626-2024 3. Through the instant petition demand notice hearing before a C date, this Court issued notice to the respondents and in the meanwhile interim measure, from the petitioner. 4. T which the only objectio remedy to challenge the appeal but on merits, there was no denial to the ground raised by the petitioner that the impugned demand was in conflict with the law laid down by the Supreme Court in Vs. Edelweiss 5. D Court, restraining the respondents tax, an amount of Rs.28, 19.02.2025 and recovered from the petitioner o against the refunds respondent-department. 6. Learned counsel for the petitioner submits that demand raised through the impugned notice dated 30.03.2024 by the Supreme Court in case (supra), written response filed by the respondent demand impugned through this petition, the recoveries 2024 (O&M) Through the instant petition, the petitioner challenged the notice dated 30.03.2024 which petition hearing before a Coordinate Bench of this Court on date, this Court issued notice to the respondents and in the meanwhile interim measure, restrained the respondents from effecting from the petitioner. The respondent-Revenue filed which the only objection raised was that the peti challenge the impugned notice through filing but on merits, there was no denial to the ground raised by the petitioner that the impugned demand was in conflict with the law laid down Supreme Court in Ghanashyam Mishra and Sons Private Limited Asset Reconstruction Company Limite Despite the interim order dated 30.05.2024, passed by this restraining the respondents from making ount of Rs.28,62,100/- was recovered from the petitioner on 19.02.2025 and further amounts of Rs.9,83,297/ recovered from the petitioner on 27.03.2026. These amounts were set off refunds to which the petitioner had been held entitled department. Learned counsel for the petitioner submits that demand raised through the impugned notice dated 30.03.2024 by the Supreme Court in Ghanashyam Mishra and Sons Private Limited’s which proposition of law has not even written response filed by the respondent-Revenue demand impugned through this petition, the recoveries the petitioner challenged the petition came up for preliminary his Court on 30.05.2024 on which date, this Court issued notice to the respondents and in the meanwhile, as an the respondents from effecting any recovery evenue filed a written response through n raised was that the petitioner had an alternate notice through filing of a statutory but on merits, there was no denial to the ground raised by the petitioner that the impugned demand was in conflict with the law laid down Ghanashyam Mishra and Sons Private Limited. Company Limited, (2021) 9 SCC 657. dated 30.05.2024, passed by this making recovery of the demanded was recovered from the petitioner on 297/- and Rs.2,87,603/- were . These amounts were set off which the petitioner had been held entitled to by the Learned counsel for the petitioner submits that demand raised through the impugned notice dated 30.03.2024 is against the law laid down Ghanashyam Mishra and Sons Private Limited’s not even been disputed in the evenue and that against the demand impugned through this petition, the recoveries made from the VANDANA 2026.04.10 16:59 I attest to the accuracy and integrity of this document CWP-13626-2024 petitioner on 19.02.2025 and 27.03.2026 are not only against down by the Supreme Co Limited’s case (supra of this Court on 30.05.2024 restrained from making any recovery from the petitioner. 7. Learned counsel for the respondent dispute the proposition of law settled Supreme Court in (supra) that once a r authority under Section 31(1) of the IBC resolution plan stand frozen. from the petitioner mechanism re errors, both in the issuance of the impugned notice dated 30.03.2024 and making of recoveries from the petitioner on 19.02.2025 and 27.03.2026 are in the process of being corrected. 8. Learned able assistance, 9. The relevant paragraph in the judgment of the Supreme Court in Ghanashyam Mishra and Sons Private Limited’s follows:- “102.1 adjudicating authority under sub claims as provided in the resolution plan shall stand frozen and will be binding on the corporate debtor and its employees, members, credit State Government or any local authority, guarantors and other 2024 (O&M) petitioner on 19.02.2025 and 27.03.2026 are not only against down by the Supreme Court in Ghanashyam Mishra and Sons Private case (supra) but are also in direct conflict with the interim order this Court on 30.05.2024 through which from making any recovery from the petitioner. Learned counsel for the respondent dispute the proposition of law settled in the petitioner’s favour Supreme Court in Ghanashyam Mishra and Sons Private Limited that once a resolution plan is duly approved by t under Section 31(1) of the IBC then all claims lan stand frozen. She further submits that the recoveries from the petitioner on 19.02.2025 and 27.03.2026 were mechanism recently introduced by the respondent both in the issuance of the impugned notice dated 30.03.2024 and making of recoveries from the petitioner on 19.02.2025 and 27.03.2026 are in the process of being corrected. Learned counsel for the parties have been heard and with their able assistance, the records of the case have also been perused. The relevant paragraph in the judgment of the Supreme Court Ghanashyam Mishra and Sons Private Limited’s 102.1 That once a resolution plan is duly approved by the adjudicating authority under sub- 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 petitioner on 19.02.2025 and 27.03.2026 are not only against the law laid Ghanashyam Mishra and Sons Private also in direct conflict with the interim order the respondent-Revenue was from making any recovery from the petitioner. Learned counsel for the respondent-Revenue fairly does not in the petitioner’s favour by the Ghanashyam Mishra and Sons Private Limited’s case lan is duly approved by the adjudicating then all claims, as provided in the submits that the recoveries made 2.2025 and 27.03.2026 were through the faceless cently introduced by the respondent-Revenue and that the both in the issuance of the impugned notice dated 30.03.2024 and making of recoveries from the petitioner on 19.02.2025 and 27.03.2026 are counsel for the parties have been heard and with their also been perused. The relevant paragraph in the judgment of the Supreme Court Ghanashyam Mishra and Sons Private Limited’s case (supra) reads as That once a resolution plan is duly approved by the -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, including the Central Government, any State Government or any local authority, guarantors and other VANDANA 2026.04.10 16:59 I attest to the accuracy and integrity of this document CWP-13626-2024 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 claim, which is not part of the resolution plan.” 10. Thus of a company under moratorium, the claims, as provided in the resolution plan stand frozen that on the date of approval of the resolution p authority, all claims which are extinguished and be entitled to initiate or are not part of the resolution plan. 11. The impugned demand of from the petitioner through the impugned notice dated 30.03.2024 was admittedly not part of the approved by the NCLT not have been demanded from the Therefore, we have no hesitation in setting aside the dated 30.03.2024 (Annexure P already made from the petitioner on 19.02.202 forthwith, along with applicable interest, 12. The recoverie 27.03.2026 were in v 30.05.2024 but on account of the fair stand taken before us by learned counsel for the respondent faceless mechanism with regard to dealing with processes under the Act has 2024 (O&M) 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 claim, which is not part of the resolution plan.” Thus, once under Section 31 (1) of the IBC of a company under moratorium, is approved by the adjudicating authority, as provided in the resolution plan stand frozen hat on the date of approval of the resolution p all claims which are not part of the resolution p extinguished and that no person, including the entitled to initiate or continue proceedings in r not part of the resolution plan. The impugned demand of Rs.38,45,397/ from the petitioner through the impugned notice dated 30.03.2024 was not part of the petitioner company’s approved by the NCLT on 03.12.2020. That being so, such amount could not have been demanded from the petitioner by the respondent erefore, we have no hesitation in setting aside the dated 30.03.2024 (Annexure P-1). Resultantly, t made from the petitioner on 19.02.202 forthwith, along with applicable interest, refunded The recoveries made from the petitioner were in violation of the interim order pas but on account of the fair stand taken before us by learned counsel for the respondent-Revenue and considering the fact that t faceless mechanism with regard to dealing with processes under the Act has 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.” r Section 31 (1) of the IBC, a resolution plan approved by the adjudicating authority, as provided in the resolution plan stand frozen. It is further clear hat on the date of approval of the resolution plan by the adjudicating part of the resolution plan stand the respondent-Revenue, would proceedings in respect of the claims which Rs.38,45,397/- raised to be made from the petitioner through the impugned notice dated 30.03.2024 was petitioner company’s resolution plan which was That being so, such amount could petitioner by the respondent-Revenue. erefore, we have no hesitation in setting aside the impugned demand Resultantly, the afore referred recoveries made from the petitioner on 19.02.2025 and 27.03.2026 shall be refunded to the petitioner. s made from the petitioner on 19.02.2025 and olation of the interim order passed by this Court on but on account of the fair stand taken before us by learned Revenue and considering the fact that the faceless mechanism with regard to dealing with processes under the Act has VANDANA 2026.04.10 16:59 I attest to the accuracy and integrity of this document CWP-13626-2024 been recently introduced by the respondent lenient view in the matt direction is issued to the Finance, Government of India to future orders passed by any Court/statutory body are forthwith complied with, in letter and spirit. 13. The petition is allowed in the above April 08, 2026 vandana Whether speaking/reasoned : Whether reportable 2024 (O&M) been recently introduced by the respondent-Revenue, we choose to take a lenient view in the matter and choose to exercise direction is issued to the Secretary, Department of Revenue, Ministry of Finance, Government of India to take immediate steps to ensure that orders passed by any Court/statutory body are forthwith complied in letter and spirit. The petition is allowed in the above (DEEPAK SIBAL JUDGE (LAPITA BANERJI) JUDGE , 2026 ther speaking/reasoned : Yes/No Whether reportable : Yes/No Revenue, we choose to take a exercise restraint. However, a ry, Department of Revenue, Ministry of take immediate steps to ensure that in orders passed by any Court/statutory body are forthwith complied The petition is allowed in the above terms. DEEPAK SIBAL) JUDGE (LAPITA BANERJI) JUDGE VANDANA 2026.04.10 16:59 I attest to the accuracy and integrity of this document