# In the matter  of Patna Highway Projects Ltd. vs. The State of Bihar & Ors.

> HC judgment dated 2024-04-24. Citation: TCN-2024-HC-00097. Patna Highway Projects Ltd. filed writ petitions challenging the demand raised under the Bihar…

- **Court:** HC
- **Order date:** 24 Apr 2024
- **Citation:** TCN-2024-HC-00097
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/patna-highway-projects-ltd-vs-the-state-of-bihar-ors-7dbeea13

## Summary

### Background

Patna Highway Projects Ltd. filed writ petitions challenging the demand raised under the Bihar Goods and Services Tax Act, 2017 (BGST Act) for the assessment years 2020-21 and 2022-23. The petitioner argued that the demands were extinguished because the State Tax Authorities did not move the National Company Law Tribunal (NCLT) to include their demand in the resolution plan under the Corporate Insolvency Resolution Process (CIRP). The NCLT had initiated CIRP based on a Financial Creditor's application, and a resolution plan was approved by the Committee of Creditors with a majority of 97% on 10.05.2020. The petitioner's management was handed over to the Resolution Applicant (RA). The State Taxes Department issued notices for assessment of tax, which the petitioner did

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## Facts

Patna Highway Projects Ltd. (the petitioner) is a company registered under the Companies Act, 1956, and is currently undergoing Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC). The petitioner challenged demands raised under the Bihar Goods and Services Tax Act, 2017 (BGST Act) for the assessment years 2020-21 and 2022-23. The petitioner argued that these demands were extinguished because the State Tax Authorities did not move the National Company Law Tribunal (NCLT) to include their demand in the resolution plan. The NCLT initiated CIRP based on an application by a Financial Creditor. A resolution plan was approved by the Committee of Creditors (CoC) with 97% majority on 10.05.2020. The petitioner's management was

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## Issues and analysis

### Issue 1: Whether the tax demands under the BGST Act for the assessment years 2020-21 and 2022-23 are …

**Ratio:** The legal principle applied is that once a resolution plan is approved by the

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**Reasoning:** The court reasoned that the State Tax Authorities failed to approach the NCLT to include

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**Interpretation:** The interpretation of Section 31 of the IBC, as clarified by the Supreme Court,

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**Application:** In this case, the State Tax Authorities did not approach the NCLT to include

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## Parties

- **Judges:** K. VINOD CH…; Harish…
- **Respondents:** Patna Highway…; The State o…
- **Other parties:** Kohi…

## Timeline

- **2010-02-24 — Agreement wi…**: Agreement executed by the petitioner with the NHAI for the upgradation of…
- **2020-01-03 — CIRP Init…**: NCLT, New Delhi, admitted the petitioner…

## 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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