# The State Tax Officer, State Of Gujarat vs. Jaykumar P. Arlani & Ors.

> NCLAT judgment dated 2026-05-11. Citation: TCN-2026-NCLAT-00195. The State Tax Officer, Gujarat, appealed against an NCLT order dissolving the Corporate…

- **Court:** NCLAT
- **Order date:** 11 May 2026
- **Citation:** TCN-2026-NCLAT-00195
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/the-state-tax-officer-state-of-gujarat-vs-jaykumar-p-arlani-ors-vw6pq

## Summary

### Background

The State Tax Officer, Gujarat, appealed against an NCLT order dissolving the Corporate Debtor (M/s. Shree Raghuvanshi Fibres Pvt. Ltd.) post-liquidation. The appellant contended its VAT and CST dues, backed by a statutory first charge under Sec.48 of the GVAT Act, should be treated as secured debt under IBC Sec.53, not operational statutory dues. The liquidator and Bank of Baroda (financial creditor) argued against this, citing non-registration of charge, non-disclosure in claim forms, and the Paschimanchal case.

## Facts

The appellant is the Sales Tax Authority of the State of Gujarat.

The Corporate Debtor, M/s. Shree Raghuvanshi Fibres Pvt. Ltd., fell in arrears of VAT under the Gujarat Value Added Tax Act, 2003 (GVAT Act) and CST for four assessment years from 2014-2015 to 2017-2018.

According to the appellant, a statutory first charge is created in terms of Sec.48 of the GVAT Act.

On 05.09.2019, the appellant initiated recovery steps and addressed a communication to the jurisdictional Mamlatdar seeking attachment and for recording of charge over the immovable properties of the Corporate Debtor, but Mamlatdar's records do not disclose any such charge or attachment.

On 18.02.2020, the Corporate Debtor was admitted to Corporate Insolvency Resolution Process (CIRP).

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority erred in treating the dues of the State Tax Department as …

**Ratio:** The Adjudicating Authority erred in treating the VAT dues of the State Tax Department as

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**Reasoning:** The definition of 'secured creditor' under Section 3(30) read with Section 3(31) of the

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**Interpretation:** A statutory first charge created by operation of law under a specific state

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**Application:** The appellant is a secured operational creditor regarding its VAT component of

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## Parties

- **Judges:** N. Seshasayee,…; Arun Baroka…; +1 more
- **Appellants:** The State Tax…
- **Respondents:** M/s. Shree…; Jaykumar P.…; +2 more
- **Other parties:** Stakeholders…
- **Advocates:** Ritu…; Rohan T…; +2 more

## Timeline

- **2014-2015 — Tax Arrears Per…**: Corporate Debtor fell in…
- **2017-2018 — Tax Arrears Pe…**: Corporate Debtor fell in…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 3(30) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-3)

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