# In the matter of Magppie International Ltd.

> NCLT judgment dated 2023-10-13. Citation: TCN-2023-NCLT-01217. The case involves an application (IA/5523/2021) filed in the context of an ongoing insolvency…

- **Court:** NCLT
- **Order date:** 13 Oct 2023
- **Citation:** TCN-2023-NCLT-01217
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/magppie-international-ltd-7052d6cd

## Summary

### Background

The case involves an application (IA/5523/2021) filed in the context of an ongoing insolvency resolution process (IB-2924/ND/2019) under the Insolvency and Bankruptcy Code (IBC), 2016. The applicant, Mr. Naveen Sachdeva (M/s. Jay Packaging), sought to set aside an order by the GST Commissioner dated 08.07.2021 and to prevent the GST Commissionerate from enforcing a Show Cause Notice, citing the moratorium period under the IBC. The applicant argued that the GST claim would hamper the Corporate Debtor's CIRP. The respondent, M/s. Magppie International Ltd., is the Corporate Debtor. The respondent argued that the Show Cause Notice had already been adjudicated and the application was infructuous.

## Facts

Mr. Naveen Sachdeva (M/s. Jay Packaging) filed an application (IA/5523/2021) within the context of the Corporate Insolvency Resolution Process (CIRP) of M/s. Magppie International Ltd. The application sought to set aside an order of the GST Commissioner dated 08.07.2021 and prevent the GST Commissionerate from recalling a Show Cause Notice. The applicant argued that the Show Cause Notice, issued on 22.10.2020, directing the Corporate Debtor to produce evidence, was in violation of the moratorium period under Section 14 of the IBC. The applicant relied on a GST circular dated 23.03.2020, clarifying issues under GST Law for Companies under IBC. The respondent argued that the Show Cause Notice had already been adjudicated by the Adjudicating Authority vide

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## Issues and analysis

### Issue 1: Whether the order of the GST Commissioner dated 08.07.2021 and the Show Cause Notice issued by the …

**Ratio:** Section 14 of the IBC, 2016 imposes a moratorium on the institution or continuation of

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**Reasoning:** The court reasoned that while Section 14 of the IBC prohibits coercive action against the

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**Interpretation:** Section 14 of the IBC is interpreted to provide a standstill period where

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**Application:** In this case, the court applied the ratio and reasoning to the facts by holding

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## Parties

- **Judges:** SHRI. P.S.N.…; RAHUL BHA…
- **Appellants:** Naveen Sachdeva…
- **Respondents:** M/s. Magppie…

## Timeline

- **2020-03-23 — GST Circ…**: Circular issued by the Principal Commissioner (GST) clarifying the issues under GST Law…
- **2020-10-22 — Show Cause…**: Show Cause Notice issued to the Corporate Debtor directing them to produce all the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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