# In the matter of Commercial Tax Department vs. Mangesh Vitthal Kekre & Ors.

> NCLAT judgment dated 2024-12-05. Citation: TCN-2024-NCLAT-00046. The Commercial Tax Department filed an appeal challenging the order dated 01.09.2023 passed…

- **Court:** NCLAT
- **Order date:** 5 Dec 2024
- **Citation:** TCN-2024-NCLAT-00046
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/commercial-tax-department-vs-mangesh-vitthal-kekre-ors-a8428c29

## Summary

### Background

The Commercial Tax Department filed an appeal challenging the order dated 01.09.2023 passed by the Adjudicating Authority (National Company Law Tribunal, Indore Special Bench, Court No. 1), in IA/131/MP/2020 in TP/125/MP/2019 in CP(IB)/159/2018. The Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, M/s. Bhagwan Motors Private Ltd., commenced by Order dated 21.06.2019. The Commercial Tax Department issued a Notice dated 03.07.2019 under Section 128 of the Madhya Pradesh VAT Act, 2002, upon VE Commercial Vehicles Limited to pay a sum of Rs.17,12,094/-. This amount was the VAT amount due for the Assessment Year 2014-15 of M/s. Bhagwan Motors Private Limited. In response to the notice, VE Commercial Vehicles Limited deposited the amount to the

…

## Facts

The Corporate Insolvency Resolution Process (CIRP) against M/s. Bhagwan Motors Private Ltd. commenced on 2019-06-21. The Commercial Tax Department issued a notice on 2019-07-03 to VE Commercial Vehicles Limited to pay Rs. 17,12,094/- as VAT due for the assessment year 2014-15 of M/s. Bhagwan Motors Private Limited. VE Commercial Vehicles Limited deposited the amount. The Resolution Professional (RP) filed IA 131/MP/2020 against VE Commercial Vehicles Limited and the Commercial Tax Officers, arguing that the deposit was a preferential transaction under Section 43 of the IBC and violated the moratorium under Section 14. The Adjudicating Authority directed the Commercial Tax Department to refund the amount. The Commercial Tax Department appealed this decision. The key

…

## Issues and analysis

### Issue 1: Whether the deposit of VAT by VE Commercial Vehicles Limited constitutes a preferential transaction …

**Ratio:** Section 43 of the IBC defines preferential transactions as those where a corporate debtor

…

**Reasoning:** The court reasoned that the transaction in question was not made by the Corporate Debtor.

…

**Interpretation:** Section 43 requires the preferential transaction to be done by the corporate

…

**Application:** In this case, VE Commercial Vehicles Limited, not the Corporate Debtor, made

…

## Parties

- **Judges:** Ashok Bh…; Arun Ba…
- **Appellants:** Commercial Tax…
- **Respondents:** M/s. Bhagwan…; Mangesh Vitthal…

## Timeline

- **2019-06-21 — Commencement…**: Corporate Insolvency Resolution Process (CIRP) against M/s. Bhagwan Motors Private Ltd.…
- **2019-07-03 — Notice by Commercial…**: Commercial Tax Department issued a Notice to VE Commercial Vehicles Limited to pay…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 43 — Preferential transactions and relevant time](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-43)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclat-new-delhi/commercial-tax-department-vs-mangesh-vitthal-kekre-ors-a8428c29