# In the matter of Magppie International Ltd.

> NCLT judgment dated 2023-10-13. Citation: TCN-2023-NCLT-01230. 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-01230
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/magppie-international-ltd-7ad18fcf

## 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 GST authorities had issued a Show Cause Notice to the Corporate Debtor, demanding recovery of ITC along with penalty interest, post the initiation of CIRP.

## Facts

Mr. Naveen Sachdeva (M/s. Jay Packaging) filed an application (IA/5523/2021) within the insolvency proceedings (IB-2924/ND/2019) 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, demanding recovery of ITC along with penalty interest, violated the moratorium under Section 14 of the IBC. The applicant relied on a GST circular dated 23.03.2020, clarifying GST issues for companies under IBC. The respondent contended that the Show Cause Notice had already been adjudicated. The Corporate Debtor's Resolution Professional, Mr. Vivek Raheja, appeared for a hearing on

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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 the circular bars coercive action against the Corporate Debtor.

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**Interpretation:** Section 14(1) of the IBC prohibits the institution or continuation of suits or

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**Application:** In this case, the applicant argued that the show-cause notice was barred by

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## Parties

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

## Timeline

- **2019-01-01 — Insolvency Proceedings…**: Company Petition No. (IB)…
- **2020-03-23 — GST Circular…**: Circular issued by the Principal Commissioner (GST) clarifying the issues under GST Law…

## 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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