 "The NCLAT dismissed the state tax department’s dues claim against Reliance Communications, upholding an earlier ruling amid insolvency proceedings.")
The National Company Law Appellate Tribunal (NCLAT) has dismissed a petition from the state tax department seeking dues from Reliance Communications (RCom). The appeal was based on claims made after RCom entered the corporate insolvency resolution process in June 2019. The NCLAT upheld an earlier decision by the Mumbai bench of the National Company Law Tribunal (NCLT), which accepted a previous claim of around Rs 94.97 lakh but rejected a later claim of Rs 6.10 crore filed in November 2021. The tribunal noted that claims based on assessments after the insolvency process cannot be accepted, reinforcing RCom’s ongoing restructuring efforts.
Title: NCLAT Dismisses State Tax Department’s Claim Against Reliance Communications
The National Company Law Appellate Tribunal (NCLAT) has dismissed a petition from the state tax department that sought to recover dues from Reliance Communications (RCom). This ruling came as a result of the tribunal’s observation that the claims were based on assessments made after RCom had already entered insolvency proceedings.
A two-member bench of NCLAT upheld a previous decision made by the Mumbai bench of the National Company Law Tribunal (NCLT), which had previously rejected the state’s second claim amounting to Rs 6.10 crore. This claim was filed by the state tax department on November 15, 2021, following an assessment order issued on August 30, 2021.
In 2019, RCom underwent a Corporate Insolvency Resolution Process (CIRP) initiated on June 22. The tax department filed two claims during this time. The first claim was filed on July 24, 2019, for Rs 94.97 lakh, which was accepted by the NCLT because it was submitted before the insolvency process began. However, the second claim, which arose from a post-insolvency assessment, could not be accepted.
The NCLAT reiterated NCLT’s findings that claims submitted after the approval of the creditors’ plan cannot be timely accepted. The judges noted the importance of adhering to procedural timelines in the insolvency resolution process.
Overall, the NCLAT found no fault in the NCLT’s previous ruling and dismissed the appeal brought by the state tax department, concluding that the claim made after the CIRP initiation was not valid.
Last Updated: September 21, 2024 | 2:15 PM IST
Tags: Reliance Communications, NCLAT, Tax Claims, Insolvency Resolution, NCLT Decision
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What did the NCLAT decide about RCom’s tax claim?
The NCLAT rejected RCom’s claim for tax relief after it started the insolvency process. -
Why was RCom seeking a tax claim?
RCom wanted to claim tax benefits as part of its financial recovery efforts during insolvency. -
What does insolvency mean for a company like RCom?
Insolvency means RCom is unable to pay its debts, and it is going through a legal process to solve its financial problems. -
How does this decision affect RCom’s future?
The denial of the tax claim may make it harder for RCom to recover financially and pay off its debts. - Can RCom appeal this decision?
Yes, RCom can appeal the NCLAT’s decision in a higher court if they choose to do so.
