Tax determination and Assessments are not covered under moratorium, only recovery of tax under CGST/SGST Act is prohibited by virtue of moratorium under Section 14 of IBC, 2016 – Assistant Commissioner, State Goods and Service Tax Department Vs. CA Rajendran P R, IP – NCLT Kochi Bench

Hon’ble NCLT Kochi Bench has held that: (i) The assessment proceedings are considered to be outside the purview of moratorium, proceedings for recovery of tax would fall within the ambit of moratorium. While the tax authorities may continue the assessment proceedings to determine the quantum of their claim, they cannot however, proceed with execution, distress or recovery. (ii) Section 82 of Kerala State Goods and Service Tax Act, 2017 (KGST Act) clearly states that the Government shall have first charge on the assets subject to the provisions of the I&B Code, 2016. (iii) It is a settled legal position that tax determination and assessments are not covered under moratorium and only recovery of tax under CGST/SGST Act is prohibited by virtue of moratorium under I&B Code, 2016. (iv) The delay in submitting the claims occurred due to the restricting of the GST Department in general and is inadvertent from the side of the applicant. This bench is of the view that there is no wilful delay or latches on the part of the applicant in filing the claim before the RP and therefore the claim should be accepted by the RP.

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