# K. Malathi Vs. State Tax Officer & Ors.

> HC judgment dated 2023-10-30. Citation: TCN-2023-HC-00024. The writ petitions challenge impugned orders related to tax demands against M/s. Sri Karunambigai…

- **Court:** HC
- **Order date:** 30 Oct 2023
- **Citation:** TCN-2023-HC-00024
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/k-malathi-vs-state-tax-officer-ors-233117ba

## Summary

### Background

The writ petitions challenge impugned orders related to tax demands against M/s. Sri Karunambigai Spinning Mills Pvt.Ltd. (SKMPL), which is under liquidation by the National Company Law Tribunal (NCLT). The petitioner, a director of SKMPL, argues that she has no locus standi to represent the company after the liquidation order. The State GST Officers visited SKMPL's premises, seized documents, and issued a show cause notice for recovery of input tax credit and demand of tax for 2018-19. The Official Liquidator did not respond to the notice or appear for hearings, leading to ex parte orders demanding taxes, interest, and penalties against SKMPL. The petitioner fears recovery actions.

## Facts

Smt.K.Malathi, the petitioner, was a Director of M/s.Sri Karunambigai Spinning Mills Pvt.Ltd. (SKMPL). NCLT ordered SKMPL to be liquidated on 2019-07-09. A.R.Ramasubramania Raja was appointed as the Official Liquidator. On 2020-06-10, State GST Officers inspected SKMPL's premises and seized documents. A show cause notice dated 2020-06-15 was issued under Section 74 of the CGST & SGST Act, demanding recovery of input tax credit and tax for 2018-19. The petitioner, based on legal advice, did not respond to the notice, claiming no locus standi due to the liquidation order. The first respondent informed the Official Liquidator and provided a hearing opportunity, but the Official Liquidator did not respond. Consequently, the first respondent passed ex parte orders

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## Issues and analysis

### Issue 1: Whether the impugned orders of demand passed against M/s.SKMPL, which is in liquidation, are …

**Ratio:** The principle is that when a company is in liquidation, the appropriate course of action

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**Reasoning:** The court reasoned that the company was already in liquidation, and the respondents were

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**Interpretation:** This issue involves the interpretation of insolvency laws and tax laws,

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**Application:** The court applied this principle to the facts by stating that the respondents

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## Parties

- **Judges:** Krishnan Ra…
- **Appellants:** Smt.K.Ma…
- **Respondents:** Karunambigai…; State Tax O…
- **Other parties:** Kohi…

## Timeline

- **2019-07-09 — Liquidation…**: NCLT ordered M/s.Sri Karunambigai Spinning…
- **2020-06-10 — Inspection of…**: State GST Officers visited SKMPL's…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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