Full Text
HIGH COURT OF DELHI
Date of Decision: 15th December, 2025
56666/2025 M/S ERA INFRA ENGINEERING LIMITED .....Petitioner
Through: Ms. Kavita Jha, Sr. Adv. and Ms. Kanika Sethi, Adv.
Through: Mr. R. Ramchandran, SSCN
Ms. Vaishali Gupta, Panel Counsel (Civil) GNCTD
JUDGMENT
29 WITH + W.P.(C) 2305/2025, CM APPL. 10941/2025 & CM APPL. 56491/2025 M S ERA INFRA ENGINEERING LIMITED.....Petitioner versus Through: Mr. R. Ramchandran, SSCN with Mr. 30 AND + W.P.(C) 2307/2025 & CM APPL. 10945/2025 M S ERA INFRA ENGINEERING LIMITED.....Petitioner versus Through: Mr. R. Ramchandran, SSC with Mr. CORAM: JUSTICE PRATHIBA M. SINGH JUSTICE SHAIL JAIN
JUDGMENT
Prathiba M. Singh, J.
1. This hearing has been done through hybrid mode.
2. These are three writ petitions seeking quashing of respective demand cum Show Cause Notices and the consequential impugned orders. The details of the same are tabulated as under: W.P.(C) PERIOD SCN IMPUGNED ORDER TOTAL DEMAND W.P.(C) 2281/2025 FY 2018-19 02.08.2024 14.11.2024 25.11.2024 Rs. 9,99,73,080/- Rs. 2,22,78,388/- W.P.(C) 2305/2025 FY 2019-20 02.08.2024 14.11.2024 Rs. 9,72,06,860/- W.P.(C) 2307/2025 FY 2017-18 02.08.2024 14.11.2024 Rs. 8,04,60,912/-
3. The background giving rise to these petitions is that the Petitioner was involved in the construction industry and owing to certain financial difficulties which it faced, it underwent insolvency proceedings before the National Company Law Tribunal, New Delhi (hereinafter, ‘NCLT’).
4. The Union Bank of India, as a financial creditor, had filed an application being CP(IB) No. 190(PB)/2017 under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter, ‘IBC’) in June, 2017.
5. As per Section 16 of the IBC, initially, an Interim Resolution Professional (hereinafter, ‘IRP’) was appointed. Claims were thereafter called and the Committee of Creditors, on 12th June, 2018 confirmed the IRP to be the Resolution Professional (hereinafter ‘RP’).Subsequently, an application bearing CA/1346/PB/2018, for confirmation of the appointment of RP was allowed by NCLT, Delhi, vide order dated 18th December, 2018.
6. In the meantime, the GST registration of the Petitioner got cancelled on 22nd July, 2020 and during the course of insolvency proceedings the GST department also filed its claims to the tune of Rs. 4,02,30,448/- before the RP.
7. On the basis of the Expressions of interest (hereinafter, ‘EOI’) that were received by the RP, the claim of the GST department was crystallised to an amount of Rs.1,94,26,381/-.
8. Eventually, the resolution plan of one M/s S. A. Infrastructure Consultants Private Limited was approved by the NCLT, Delhi, on 11th June, 2024. The new management has since taken over the Petitioner company.
9. In the meantime, the impugned orders were issued to the Petitioner on 14th November, 2024 and 25th November, 2024, seeking to recover the sums tabulated above, along with interest.
10. In respect of these demands which are impugned before the Court, an interim order was passed on 21st February, 2025 in the following terms.
11. The submission of Ms. Kavita Jha, ld. Senior Counsel is that the impugned demands would be untenable, as they relate to the period prior to the final approval of the resolution plan by the NCLT, Delhi on 11th June, 2024 and the claims of the GST Department were already considered and made part of the resolution process. Hence, no fresh demands could have been raised in respect of the previous periods after the approval of the resolution plan.
12. Mr. R. Ramachandran, ld. SSC, on the other hand merely states that the orders are only meant to crystallize the amounts and no steps for recovery have been taken by the Department.
13. The Court has heard the ld. Counsels for the parties.
14. The order dated 11th June, 2024, passed by NCLT- Delhi, by which the resolution plan was approved, reads as under.
15. In terms of the above order dated 11th June, 2024, passed by NCLT, the new management has since taken over the Petitioner company. Thus, the stand in the writ petitions is that subsequent to this order of the NCLT, Delhi dated 11th June, 2024 coming into effect, no demands can be raised by the GST Department for the time period prior to the passing of such order.
16. In “Ghanashyam Mishra & Sons Pvt. Ltd. vs. Edelweiss Asset Reconstruction Company Limited in CA: 8129 of 2019” the Supreme Court, while considering the scheme of the IBC, has 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.[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.”
17. Further, in Sundaresh Bhatt, Liquidator of ABG Shipyard v. Central Board of Indirect Taxes and Customs (2023)1 SCC 472, as relied upon by Mr. R. Ramachandran, ld. SSC, the Supreme Court has held as under:
18. In the opinion of this Court, from the above two decisions it becomes clear that no demand can be raised after the resolution plan has been approved,in respect of a period prior thereto.
19. The GST Department, having already participated in the insolvency proceedings and having filed its claims, cannot raise further demands in this manner, as there has to be a final conclusion to the insolvency proceedings. Moreover, the new management cannot be saddled with any of the additional demands in respect of the previous period.
20. Accordingly, the Impugned Orders-In-Original dated 14th November, 2024 and 25th November, 2024 and the consequential demands raised therein are not tenable. The same are, thus, set aside.
21. Needless to add, the merits of the orders or the demands have not been gone into by this Court.
22. The present petitions are disposed of in said terms. Pending applications, if any, are also disposed of.
PRATHIBA M. SINGH JUDGE SHAIL JAIN JUDGE DECEMBER 15, 2025/jyt/ss