# In the matter of The Sirpur Paper Mills Limited & Another Vs. Union of India & Two Others W.P.No.25827 of 2019

> HC judgment dated 2022-01-18. Citation: TCN-2022-HC-00065. The Sirpur Paper Mills Limited & Another filed a writ petition under Article 226 of the…

- **Court:** HC
- **Order date:** 18 Jan 2022
- **Citation:** TCN-2022-HC-00065
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/the-sirpur-paper-mills-limited-another-vs-union-of-india-two-others-wpno25827-of-65018b8a

## Summary

### Background

The Sirpur Paper Mills Limited & Another filed a writ petition under Article 226 of the Constitution of India seeking to quash notices dated 22.09.2019, 21.10.2019, and 30.10.2019 issued by respondent Nos. 2 and 3 for the assessment year 2017-18, arguing they are illegal and non-est. The petitioners also sought a direction to prevent the respondents from reopening claims settled in insolvency proceedings. M/s. Rama Road Lines and others had initiated corporate insolvency resolution process against petitioner No. 1 under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC). The application was admitted on 18.09.2017. A resolution plan was submitted by petitioner No. 2 on 12.02.2018, revised after discussions with the committee of creditors, and finally

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## Facts

The Sirpur Paper Mills Limited & Another filed a writ petition challenging notices from the Income Tax Department (respondents) for the assessment year 2017-18. These notices sought to reopen claims already settled during insolvency proceedings initiated by M/s. Rama Road Lines under Section 9 of the IBC. The corporate insolvency resolution process was initiated against petitioner No. 1, and a resolution plan was approved by the National Company Law Tribunal (NCLT) on 19.07.2018. The petitioners argued that the Income Tax Department, as an operational creditor, is bound by the resolution plan under Section 31(1) of the IBC. The resolution plan included a clause (7.5(c)) extinguishing all dues under the Income Tax Act for the period prior to the completion date. The

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## Issues and analysis

### Issue 1: Whether the notices issued by the Income Tax Department for assessment year 2017-18 are valid in …

**Ratio:** Once a resolution plan is approved by the adjudicating authority under Section 31(1) of

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**Reasoning:** The court relied on the Supreme Court's decisions in Committee of Creditors of Essar

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**Interpretation:** The IBC aims to consolidate and amend laws relating to reorganization and

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**Application:** The court found that the notices issued by the Income Tax Department sought to

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## Parties

- **Judges:** UJJAL B…; CHILLAKUR…
- **Respondents:** The Sirpur Paper…; Union of…

## Timeline

- **2017-09-18 — Application A…**: Application under Section 9 of IBC by M/s. Rama Road Lines admitted by the National…
- **2017-09-25 — Public Annou…**: Resolution professional made a public…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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