Hon’ble Himachal Pradesh High Court held that:
(i) Since the provisions of the said Code had overriding effect on all laws in view of Section 238 of the Code, it was not permissible for the respondents to create a charge on the property of the Corporate Debtor during the currency of the moratorium in violation of the provisions of the IBC.
(ii) As per the amended Section 31 of the Code, the Clean Slate principle of taking over Corporate Debtor under a Resolution Plan, will also apply to taking over by way of acquisition plan.
(iii) The plea of the respondents that the tax dues claimed by them will have priority as a “Crown Debt”, therefore, cannot be accepted, and their action in continuing the said red entry/charge on account of dues recoverable from erstwhile management of the Corporate Debtor under the Himachal Pradesh Value Added Tax Act, 2005, Himachal Pradesh Goods and Services Tax Act, 2017 and the CST Act, 1956, would be clearly illegal & arbitrary.