IN THE HIGH COURT AT CALCUTTA

(Constitutional Writ Jurisdiction)

APPELLATE SIDE

Present:

The Hon’ble Justice Aryak Dutt

WPA No. 6268 of 2026

SREI Equipment Finance Limited

Vs.

Union of India & Ors.

For the Appellants : Mr. Avra Mazumder,

Ms. Alisha Das,

Ms. Sreeja Mukherjee,

Ms. Rupomita Ghosh,

Ms. Saakshi Shaw,

Mr. Suman Bhowmik,

Ms. Elina Dey,

Mr. Gaurav Gupta.

... Advocates.

For the Respondent : Mr. Uday Sankar Bhattacharya

(CGST Authority) Mr. Kaustav Kanti Maitri

Ms. Banani Bhattacharya

...Advocates.

Heard on : 01.09.2026, 11.09.2026,

18.09.2026, 25.09.2026

Hearing Concluded On : 25.09.2026

Judgment Delivered On : 01.10.2026

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Aryak Dutt, J.:

1. The petitioner, a Non-Banking Financial Company incorporated

under the Companies Act, 1956, and is duly registered under the

Goods and Services Tax laws, assails a Show Cause-cum-Demand

Notice dated 26

th September, 2025 along with summary in Form

GST DRC-01 and the consequent Order-in-Original dated 29

th

December, 2025, with summary in Form GST DRC -07, by which

the jurisdictional Central Goods and Services Tax Authority has

confirmed a demand of IGST of Rs. 1,68,78,057/- under Section

73(9) of the Central Goods and Services Tax Act, 2017 (herein after

referred to as the CGST Act), together with interest under Section

50 and penalty of Rs. 16,87,806/-, on the allegation of excess

availment of IGST input tax credit on imported goods in Financial

Year 2021-22. The petitioner also questions a notice dated 13

th

January, 2026 demanding interest under Section 50 of the CGST

Act for alleged delayed filing of GSTR-3B returns for July and

August, 2021.

2. The petitioner's case is that every one of these demands relates to

a period before 11th August, 2023, the date on which the National

Company Law Tribunal approved the resolution plan in its

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corporate insolvency resolution process. In any event no claim in

respect of these dues was ever lodged in that process. By force of

Section 31(1) of the Insolvency and Bankruptcy Code, 2016

(hereinafter referred to as “the IBC” or “the Code of 2016”), as

authoritatively construed by the Supreme Court, the dues stood

extinguished and no proceeding in respect of them could

thereafter be initiated or continued.

3. The material facts are not in dispute and are recorded in the

impugned order in original itself. On an application by the Reserve

Bank of India under Section 227 read with Section 239(2)(zk) of

the Code of 2016 with rules of the Insolvency and Bankruptcy

(Insolvency and Liquidation Proceedings of Financial Service

Providers and Application to Adjudicating Authority) Rules, 2019,

the National Company Law Tribunal, Kolkata Bench, by an order

dated 8th October, 2021, admitted the petitioner and its holding

company, SREI Infrastructure Finance Limited, into the Corporate

Insolvency Resolution Process (hereinafter referred to as “the

CIRP”). A moratorium under Section 14 of the Code of 2016 came

into force from that date. Thereafter, public announcements

inviting claims under Section 15 of the Code of 2016 were issued

on 11

th October, 2021.

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4. Admittedly, neither the respondents nor any other GST authority

lodged a claim before the Administrator/Resolution Professional in

respect of the GST dues now demanded for the Financial Year

2021-22.

5. The resolution plan submitted by National Asset Reconstruction

Company Limited was approved by the Committee of Creditors

and thereafter by the Adjudicating Authority under Section 31 of

the Code of 2016, by an order dated 11

th August, 2023 (hereinafter

referred to as “the Effective Date”). Clause 3.2.9 of the approved

plan, deals with the Treatment of Government Authorities, which

provides in substance that claims, liabilities and proceedings

pertaining to the period prior to the Effective Date, whether known

or unknown, assessed or unassessed, crystallised or contingent,

shall be dealt with strictly in terms of the approved Resolution

Plan and, save as specifically provided therein, shall stand

extinguished. A challenge to the approval of the plan was rejected

by the National Company Law Appellate Tribunal, Principal

Bench, New Delhi, on 5

th January, 2024. The plan has therefore

attained its finality.

6. More than two years after the Effective Date, an audit query dated

1

st August, 2025, was issued alleging erroneous availment of IGST

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Input Tax Credit for Financial Year 2021-22. The petitioner replied

to the same on 22nd September, 2025, pointing out the concluded

CIRP and the approved Resolution Plan. The impugned Show

Cause-cum-Demand Notice followed on 26th September, 2025,

proposing a demand of Rs. 1,68,78,057/ - with penalty,

aggregating to Rs. 1,85,65,863/-. The petitioner replied to the

impugned show cause-cum- demand notice in Form GST DRC-06

on 22nd October, 2025, relying on Sections 31 and 238 of the

Code of 2016, the decisions of the Supreme Court and the Board's

own circulars. Thereafter, the respondent no.2, by the Order-in-

Original dated 29

th December, 2025, confirmed the demand of

IGST. The order expressly records that the petitioner was under

CIRP from 8th October, 2021 to 11

th August, 2023, that no GST

claim for the period was lodged before the Resolution Professional

and that the resolution plan stood approved by the Adjudicating

Authority, but nonetheless proceeds to confirm the demand on the

footing that the cause of action arose after the moratorium.

7. By a separate notice dated 13

th January, 2026, interest under

Section 50 was demanded for alleged delay in filing GSTR -3B

returns for July and August, 2021, which the petitioner answered

on 22

nd January, 2026 by reiterating the bar of extinguishment.

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8. Learned Advocate appearing for the petitioner have submitted that

Section 31(1) of the Code of 2016, binds the Central Government

and every authority to whom statutory dues are owed. Under

Section 238 the Code of 2016, overrides anything inconsistent in

any other law, reliance in this regard has been placed on the case

of Principal Commissioner of Income Tax v. Monnet Ispat and

Energy Ltd., reported in (2018) 18 SCC 786. The Supreme Court

has also held in the case of Committee of Creditors of Essar

Steel India Ltd. v. Satish Kumar Gupta , reported in (2020) 8

SCC 531, Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss

Asset Reconstruction Co. Ltd., reported in (2021) 9 SCC 657,

Ruchi Soya Industries Ltd. v. Union of India , reported in

(2022) 6 SCC 343 and Vaibhav Goel v. Deputy Commissioner

of Income Tax, reported in (2025) 8 SCC 511, that statutory

dues not forming part of an approved plan stand extinguished and

no proceeding in respect of them can be initiated or continued.

9. It was further submitted that on the very resolution plan in

question the petitioner has succeeded before the Supreme Court

being Commissioner of Sales Tax, Orissa v. SREI Equipment

Finance Ltd., in Civil Appeal Nos. 1436-1439 of 2010 and

before the High Courts of Karnataka, Gujarat, Bombay and

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Allahabad in respect of pre-approval tax demands, including an

Order-in-Original under the CGST Act for Financial Year 2021

quashed by the Gujarat High Court. This Court in the case of

Ultra Tech Cement Ltd. v. Union of India in WPA 2036 of

2020, decided on 18

th September, 2026, has quashed pre-

resolution income tax demands. CBIC by their own Circular No.

134/04/2020-GST dated 23

rd March, 2020 and Instruction No.

1083/02/2022-CX8 dated 23

rd May, 2022, themselves

acknowledge that unfiled or belated claims stand extinguished on

approval of the plan. Section 88 of the CGST Act concerns

companies in liquidation and has no application to a revived

corporate debtor. The writ petition is maintainable because the

challenge goes to the root of jurisdiction.

10. Learned Advocate appearing for the CGST authorities fairly did

not dispute the binding nature of Ghanashyam Mishra (supra).

The contention, rather, was that determination or adjudication of

a statutory tax liability is conceptually distinct from its recovery.

In the case of Sundaresh Bhatt, Liquidator of ABG Shipyard v.

Central Board of Indirect Taxes and Customs , reported in

(2023) 1 SCC 472, the Supreme Court recognised the continuing

jurisdiction of the tax authority to assess and determine tax,

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interest, fine or penalty while the moratorium operates, forbidding

only recovery. Section 88 of the CGST Act shows that GST

liabilities are contemplated in the insolvency context and Sections

73 and 75 furnish the machinery of determination. Section 238 of

the Code of 2016, overrides only to the extent of actual

inconsistency, and there is none between determining the liability

and leaving its enforceability to the Code. No coercive action was

taken during the moratorium. Alternatively, the adjudication itself

ought not to be quashed and the Court may at best hold that

recovery is subject to the approved plan.

11. Section 31(1) of the Code of 2016, as it stands after the

amendment of 16

th August, 2019, provides that the resolution

plan approved by the Adjudicating Authority “shall be binding on

the corporate debtor and its employees, members, creditors,

including the Central Government, any State Government or any

local authority to whom a debt in respect of the payment of dues

arising under any law for the time being in force, such as

authorities to whom statutory dues are owed, guarantors and

other stakeholders involved in the resolution plan”. The CGST

authorities are included.

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12. The consequence of approval was explained by a Bench of Three

Learned Judges of the Hon’ble Apex Court in the case of

Ghanashyam Mishra (supra) .

13. The rationale had earlier been stated by the Hon’ble Apex Court

in the case of Committee of Creditors of Essar Steel India Ltd.

(supra) which reads as “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” all claims must be submitted to and

decided by the resolution professional so that the applicant knows

exactly what has to be paid and may take over the business “on a

fresh slate”.

14. In the case of Vaibhav Goel (supra), the Hon’ble Apex Court has

held that the demand notices under the Income Tax Act w ere

issued after approval of the plan for assessment years prior to it,

no claim having been lodged. The Supreme Court has further held

that the dues stood extinguished, and the subsequent demand

raised is invalid once the resolution plan is approved by NCLT, no

belated claim can be included therein that was not made earlier,

and that such demands will operate as roadblocks in

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implementing the approved resolution plan and are invalid and

cannot be enforced.

15. Applying these principles, the position is plain. The tax period in

question, Financial Year 2021-22, falls wholly before 11

th August,

2023 and no claim was lodged during that period. The impugned

order itself records these facts. The demand therefore stoo d

extinguished on 11

th August, 2023, and the respondents were not

entitled thereafter to initiate any proceedings in respect to it. The

show cause notice, being the very initiation of a proceeding under

Section 73, and the Order-in-Original, being its culmination, are

both proceedings in respect of an extinguished claim.

16. The finding in the impugned order that the cause of action arose

after the moratorium does not improve the respondents' case. The

liability, if any, relates to Financial Year 2021-22. Portion of it

which relates to the months after 8

th October, 2021, arose during

the CIRP itself and was equally required to be brought to the

notice of the Administrator/Resolution Professional so as to be

dealt with in the plan. When the respondents issued the show

cause notice on September, 2025, there was no claim left to

adjudicate.

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17. The approved plan itself, by Clause 3.2.9, provides that all pre-

Effective Date claims of Government authorities, whether assessed

or unassessed, known or unknown, shall stand extinguished save

as provided therein. The plan, having been approved under

Section 31 of the Code of 2016 and having attained finality, binds

the respondents contractually as well as statutorily.

18. The respondents' case rests on Sundaresh Bhatt (supra). On a

careful reading, that decision does not support them.

19. The case of Sundaresh Bhatt (supra). was concerned with the

period while the moratorium operated under Sections 14 and 33(5)

of Code of 2016 in a liquidation, where the corporate debtor's

liabilities are not extinguished but are paid out of the liquidation

estate in the order of priority under Section 53.

20. In the case of Sundaresh Bhatt (supra) it was held that demand

notices are “an initiation of legal proceedings against the corporate

debtor”. Ghanashyam Mishra (supra) bars not only recovery but

the initiation or continuation of “any proceedings” in respect of an

extinguished claim. The respondents' distinction between

adjudication and recovery cannot survive. Nor, for that matter, is

the impugned order a mere academic quantification: it confirms a

demand under Section 73(9), levies interest and imposes penalty,

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and is accompanied by a summary in Form GST DRC -07, which

on its own terms is a recoverable demand under the CGST Act.

21. Section 88 of the CGST Act does not assist the respondents. It

deals with the liability of a company in liquidation and of its

directors. The petitioner was never ordered to be wound up. CIRP

culminated in a resolution plan and it continues as a going

concern under new manag ement. Even otherwise, Section 88

presupposes a subsisting tax liability and cannot revive one

extinguished under Section 31(1) of the Code of 2016. The CGST

Act itself, by Section 82, makes the Government's first charge

"save as otherwise provided in the Insolvency and Bankruptcy

Code, 2016", and Section 238 of the Code gives the Code

overriding effect over anything inconsistent in any other law, in

this regard reliance is placed on Sundaresh Bhatt (supra). The

respondents' reliance on Sections 73 and 75 of the CGST Act is

answered in the same way those provisions confer a general power

of adjudication, but its exercise in respect of a claim that the Code

has extinguished is directly inconsistent with Section 31(1).

22. It is also relevant that the Board has itself recognised the

position. Circular No. 134/04/2020-GST dated 23

rd March, 2020,

contemplates that dues for the period prior to the insolvency

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commencement date are to be claimed before the Adjudicating

Authority/Resolution Professional, and the Standard Operating

Procedure under Instruction No. 1083/02/2022 -CX8 dated 23

rd

May, 2022, as placed before this Court, records that claims not

submitted, or submitted belatedly, stand extinguished upon

approval of the resolution plan. The impugned order does not

advert to either. Departmental adjudicating officers cannot ignore

instructions of the Board issued for the uniform administration of

the Act.

23. The same resolution plan has been considered by several High

Courts in the petitioner's own case, pre-approval tax demands

under different statutes, including an Order-in-Original under the

CGST Act, have been set aside. Those decisions have not been

interfered with. Considerations of consistency and judicial comity

point in the same direction as the law laid down by the Supreme

Court.

24. The existence of an appellate remedy under Section 107 of the

CGST Act is not an absolute bar to the exercise of writ jurisdiction

where the authority has acted wholly without jurisdiction or in

disregard of binding law. In this regard reliance is placed in the

case of Whirlpool Corporation v. Registrar of Trade Marks ,

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reported in (1998) 8 SCC 1 and Godrej Sara Lee Ltd. v. Excise

and Taxation Officer, reported in 2023 SCC OnLine SC 95 . The

facts are admitted. The question is one of pure law going to the

root of the respondents' authority to initiate the proceedings at all

and the answer is concluded by decisions of the Supreme Court.

Relegating the petitioner to an appeal, with its attendant pre-

deposit, would serve no purpose.

25. In view of the conclusion reached above, it is unnecessary to

examine the petitioner's further contention that no penalty could

be imposed in a proceeding under Section 73 absent any finding of

fraud, wilful misstatement or suppression.

26. For the reasons stated, the writ petition succeeds. It is held that

the dues claimed by the respondents for Financial Year 2021-22,

together with interest and penalty thereon, stood extinguished

upon approval of the resolution plan by the Adjudicating Authority

on 11

th August, 2023, and that the respondents had no

jurisdiction to initiate or continue any proceeding in respect

thereof.

27. The Show Cause-cum-Demand Notice dated 26

th September,

2025 with summary in Form GST DRC -01, the Order-in-Original

dated 29

th December, 2025 and the summary of order in Form

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GST DRC-07 of even date, and all proceedings taken thereunder,

are quashed and set aside.

28. The notice dated 13th January, 2026 demanding interest under

Section 50 of the CGST Act for the tax periods July and August,

2021 is also quashed.

29. Nothing in this order shall be construed as an expression of

opinion on the subsequent liability of the petitioner if any.

30. Accordingly, WPA No. 6268 of 2026 is allowed in the above

terms.

31. There shall be no order as to costs.

32. Urgent certified copies of this judgment and order, if applied for,

be supplied to the parties upon compliance of all formalities.

(Aryak Dutt, J.)