Authority: National Company Law Tribunal, Division Bench (Court–I), Chennai
Order Date: 22 June 2026
Case Overview
The matter pertains to an Interim Application (IA(IBC)/36(CHE)/2026) filed within the main insolvency petition CP(IBC)/99(CHE)/2024, where Canara Bank is the petitioner and ARS Energy Pvt Ltd is the corporate debtor. The application was filed by the Resolution Professional (RP) seeking to set aside GST proceedings initiated against the corporate debtor. The specific proceedings targeted were a Show Cause Notice dated 27 June 2025, a personal hearing notice dated 15 October 2025, and a consequential order dated 24 November 2025. The GST department, despite service of notice, was not represented at the hearing. The legal counsel for the Applicant/RP, Mr. Vijay Prabhu, was present.
The tribunal based its decision on settled legal principle that during a Corporate Insolvency Resolution Process (CIRP) or liquidation, assessment proceedings by tax authorities may be conducted, but recovery actions cannot be initiated. This principle forms the foundation for handling tax claims during insolvency proceedings.
Final Outcome
The Hon'ble Bench comprising Member (Judicial) Shri Sanjiv Jain and Member (Technical) Shri Venkataraman Subramaniam disposed of the application. The tribunal ruled that considering this settled proposition of law, the application did not survive and was therefore disposed of. The practical consequence is that the GST assessment proceedings (the Show Cause Notice and subsequent order) are not quashed and may continue, but any recovery action based on them remains prohibited under the insolvency framework.
Topics: Insolvency Law, GST Proceedings