Page 30 - GSTL_23rd July 2020_Vol 38_Part 4

J88 GST LAW TIMES [ Vol. 38
filed, the prohibition is absolute. The Corporate Debtor needs to take shelter of
Section 238 of the IBC, 2016 and then deal with tax authorities.
The present changes under GST is an outcome of the ruling [Kiran Global
Chem Ltd. (2019-TIOLCORP-12-NCLT)], wherein the NCLT Bench, Chennai or-
dered the GST Authorities to revoke cancellation of GST registration of the Cor-
porate Debtor and directed the Tax Authorities to allow the Corporate Debtor to
pay post-admission GST dues and also allowed ITC to that extent. The GST Laws
being silent in this respect, the Corporate Debtor had to approach the NCLT tak-
ing the shelter of Section 238 of the IBC, 2016. The Bench was of the view that :
(a) Tax Authorities falls within the ambit of the Operational Creditors
under the provisions of IBC, 2016;
(b) Tax Authorities can claim tax dues by filing a claim before the Reso-
lution Professional like any other Operational Creditor;
(c) The aim of the IBC, 2016 is resolution of the Corporate Debtor while
keeping it a going concern;
(d) That IBC, 2016 being an overriding Code, GST Act shall allow the
Corporate Debtor to file GST Returns without insisting on pre-
admission dues.
(e) That the Tax Authorities shall not raise any objections on the pretext
that since no provision has been made in GST Laws or in its soft-
ware to accept such accounts, the same cannot be allowed.
However, the new rules do not seem to have envisaged several eventual-
ities, and we are of the view that these might be again clarified. In the notes be-
low we have attempted a clarification of the same for your reference.
Decoding relevant notification and circular
Registration [Notification No. 11/2020-C.T., dated 21-3-2020 (Pt. No. 2)
read with C.B.I. & C. Circular No. 134/04/2020-GST, dated 23-3-2020 (Pt. Nos. 2
& 4)] :
IRP/RP as distinct person of the Corporate Debtor :
(a) Prior to the notification, where Corporate Debtor goes under
CIRP, IRP/RP has to comply with GST Laws as per the exist-
ing registration of the Corporate Debtor. IRP/RP and Corpo-
rate Debtor/Registered Person was treated as one and the
same. However, with this notification, the GST Laws now
treats IRP/RP as distinct person of the Corporate Debtor. But
the very concept has been confused with recent circular
[C.B.I. & C. Circular No. 138/08/2020-GST, dated 6-5-2020
(Pt. No. 2)] [2020 (36) G.S.T.L. C3]] wherein it is clarified that
the said notification was issued to devise a special procedure
to overcome the requirement of sequential filing of Form
GSTR-3B and that it shall be applicable only in case where the
taxpayer (Corporate Debtor) have defaulted in filing returns.
So does that mean that IRP/RP shall be considered as distinct
person only in case where Corporate Debtor has defaulted in
filing returns? It seems that there is a disconnect between the
notification and the circular so issued which has created con-
fusion.
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