# In the matter of Nav Jyoti Agro Foods Pvt. Ltd. IA No. 307-2021 in CP (IB) No. 337-Chd-Hry-2018

> NCLT judgment dated 2022-12-15. Citation: TCN-2022-NCLT-00148. The case pertains to IA No. 307/2021 in CP (IB) No. 337/Chd/Hry/2018, an application filed by…

- **Court:** NCLT
- **Order date:** 15 Dec 2022
- **Citation:** TCN-2022-NCLT-00148
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/nav-jyoti-agro-foods-pvt-ltd-ia-no-307-2021-in-cp-ib-no-337-chd-hry-2018-58e9fca7

## Summary

### Background

The case pertains to IA No. 307/2021 in CP (IB) No. 337/Chd/Hry/2018, an application filed by the Resolution Professional seeking directions against the Income Tax Department to refund a recovery of Rs. 85,04,845 made on 16.06.2020. The Corporate Insolvency Resolution Process (CIRP) against NavJyoti Limited was initiated on 12.02.2019. A moratorium under Section 14 of the Insolvency and Bankruptcy Code was declared. The Resolution Professional was appointed on 26.03.2019. An application for liquidation of the corporate debtor, IA No. 1107/2019, is pending approval.

## Facts

The Corporate Insolvency Resolution Process (CIRP) was initiated against NavJyoti Limited on 12.02.2019. A moratorium was declared under Section 14 of the Insolvency and Bankruptcy Code. The Income Tax Department recovered Rs. 85,04,845 on 16.06.2020, during the moratorium period, by appropriating advance tax/TDS against outstanding demands. According to an intimation order dated 02.10.2019, the corporate debtor was entitled to a refund of Rs. 85,04,845 for the assessment year 2018-19. The Resolution Professional requested a refund of the recovered amount, citing the moratorium provisions. The Income Tax Department claimed a huge demand of Rs. 71,70,17,298 was outstanding against the assessee and the refund was adjusted against this demand. The Resolution Professional

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## Issues and analysis

### Issue 1: Whether the Income Tax Department's recovery of Rs. 85,04,845 during the moratorium period, by …

**Ratio:** The legal principle is that the Insolvency and Bankruptcy Code (IBC) has overriding

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**Reasoning:** The court reasoned that the moratorium under Section 14 of the IBC expressly interdicts

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**Interpretation:** The interpretation of Section 14 of the IBC, in conjunction with Section 238,

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**Application:** In this specific case, the Income Tax Department's recovery of Rs. 85,04,845

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## Parties

- **Judges:** Harnam Singh…; SUBRATA KUM…
- **Appellants:** Suresh Kumar…
- **Respondents:** Nav Jyoti Agro…; Department of…

## Timeline

- **2019-02-12 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP)…
- **2019-02-12 — Moratorium D…**: A moratorium under section…

## 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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