cbic: Tax appellate tribunal asks CBIC to frame norms for tax recovery in insolvency cases
The tribunal noted that the assessee against whom the IBC proceedings are initiated approach CESTAT for disposing of the appeals in the light of the NCLT‘s orders. However, in the absence of any guideline by the CBIC, the tax officers are unaware as to what stand is to be taken in such cases.
“Therefore, we are of the view that the Central Board of Indirect Taxes & Customs (CBIC) may consider issuing guideline/procedure for dealing with the case before this tribunal wherein, against the assesse’s company IBC proceeding has been initiated,” the CESTAT said in an order dated October 20.
KPMG Tax Partner Abhishek Jain said the insolvency and bankruptcy law in India overrides any other law and stipulates that recovery proceedings including tax recovery cannot be initiated post approval of the resolution plan. This has also been affirmed by the apex court in the case of Ghanashyam Mishra & Sons.
“This judgement by the CESTAT will be much appreciated by the industry, and the guidelines when issued will help streamline the process for indirect tax authorities to tackle matters involving interplay with the IBC law and avoid unnecessary litigation,” Jain added.