SUNDARESH BHATT, LIQUIDATOR OF ABG SHIPYARD versus CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS

Citation: [2022] 12 S.C.R. 641 · Decided: 26-08-2022 · Supreme Court of India · Bench: N.V. RAMANA · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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SUNDARESH BHATT, LIQUIDATOR OF ABG SHIPYARD
v.
CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS
(Civil Appeal No. 7667 of 2021)
AUGUST 26, 2022
[N. V. RAMANA, CJI, J. K. MAHESHWARI AND
HIMA KOHLI, JJ.]
Insolvency and Bankruptcy Code, 2016 – ss.14, 33(5), 53,
238 – Customs Act – Whether the provisions of the IBC would prevail
over the Customs Act and if so, to what extent – Held: The IBC
would prevail over the Customs Act to the extent that once moratorium
is imposed in terms of ss.14 or 33(5) of the IBC as the case may be,
the respondent authority only has a limited jurisdiction to assess/
determine the quantum of customs duty and other levies – The
respondent authority does not have the power to initiate recovery
of dues by means of sale/confiscation, as provided under the
Customs Act – After such assessment, the respondent authority has
to submit its claims (concerning customs dues/ /operational debt) in
terms of the procedure laid down, in strict compliance of the time
periods prescribed under the IBC, before the adjudicating authority
– In any case, the IRP/RP/liquidator can immediately secure goods
from the respondent authority to be dealt with appropriately, in terms
of the IBC – Interpretation of Statutes – Harmonious Construction.
Insolvency and Bankruptcy Code, 2016 – Corporate
Insolvency Process – Various stages involved in the corporate
insolvency process in India – Discussed.
Insolvency and Bankruptcy Code, 2016 – s.14 – Purpose of
the moratorium – Held: s.14 of the IBC prescribes a moratorium on
the initiation of Corporate Insolvency Resolution Process (CIRP)
proceedings and its effects – One of the purposes of the moratorium
is to keep the assets of the Corporate Debtor together during the
insolvency resolution process and to facilitate orderly completion
of the processes envisaged under the statute – Such measures ensure
the curtailing of parallel proceedings and reduce the possibility of
conflicting outcomes in the process – One of the motivations of
imposing a moratorium is for s.14(1)(a), (b), and (c) of the IBC to
   [2022] 12 S.C.R. 641
641
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SUPREME COURT REPORTS
[2022] 12 S.C.R.
form a shield that protects pecuniary attacks against the Corporate
Debtor – This is done in order to provide the Corporate Debtor
with breathing space, to allow it to continue as a going concern
and rehabilitate itself – Any contrary interpretation would crack
this shield and would have adverse consequences on the objective
sought to be achieved.
Words and Phrases – “Abandonment of Goods” – Discussed.
Collector of Customs v. Dytron (India) Ltd. 1999 ELT
342 Cal (39); S.V. Kondaskar v. V.M. Deshpande, AIR
1972 SC 878 : [1972] 2 SCR 965 (43); Gujarat Urja
Vikas Nigam Ltd. v. Amit Gupta (2021) 7 SCC 209 (47)
– referred to.
Case Law Reference
[1972] 2 SCR 965
referred to
Para 43
(2021) 7 SCC 209
referred to
Para 47
CIVIL APPELLATE JURISDICTION : Civil Appeal No.7667
of 2021.
From the Judgment and Order dated 22.11.2021 of the National
Company Law Appellate Tribunal, New Delhi in Company Appeal (AT)
(Insolvency) No.236 of 2021.
Tushar Mehta, SG, K.M. Nataraj, ASG, Dr. Abhishek Manu
Singhvi, Gaurav Mitra, Arvind Datar, Jay Savla, Mukul Rohatgi,
Siddhartha Dave, Vikram Nankani, Sr.Advs., Sameer Pandit, Aman Raj
Gandhi, Parthasarathy Bose, Anuj Jain, Aditya Ladha, Ananya Pratap
Singh, Azeem Samuel, Nidhiram, Akash Kakade, Gurdeep Singh Sachar,
Vikrant Shetty, Shriya Ray Chaudhary, Swetab Kumar, Somanatha
Padhan, Abhishek Sharma, Ms. Ashly Cherian, Gaurav Arora, Kamlendra
Singh, Ms. Renuka, Ms. Renuka Sahu, Alok Tripathi, Rupesh Kumar,
Kannu Agarwal, Mayank Pandey, Mukesh Kumar Maroria, Shiv Mangal
Sharma, Saurabh Rajpal, Ms. Shrinjan Khosla for M/S. Aura & Co.,
Jasdeep Singh Dhillon, Salil Thakore, Prabhay Chaurasia, Rahul Gupta,
Ms. R. Nair, Gaurav Mathur, Ms. Anushree Prashit Kapadia, Abhishek
Shah, Ms. Priyanka Rathi, Shashank Khurana, M/S. Cyril Amarchand
Mangaldas, Advs. for the appearing parties.
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The Judgment of the Court was delivered by
N. V. RAMANA, CJI
1. The present Civil Appeal under Section 62(1) of the Insolvency
and Bankruptcy Code, 2016 (“IBC”) arises out of the impugned judgment
dated 22.11.2021 passed by the National Company Law Appellate
Tribunal, New Delhi (“NCLAT”) in Company Appeal (AT) (Insolvency)
No. 236 of 2021. Vide the impugned judgment, the NCLAT has allowed
the appeal filed by the respondent against the order of the National
Company Law Tribunal,
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