# 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-00158. 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-00158
- **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-2018-666c3818

## 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 direction against the Income Tax Department to refund a recovery of Rs. 85,04,845/- made on 16.06.2020 to the account of the corporate debtor, Nav Jyoti Agro Foods Pvt. Ltd. The Corporate Insolvency Resolution Process (CIRP) against the corporate debtor was initiated vide order dated 12.02.2019. A moratorium was declared under section 14 of the Insolvency and Bankruptcy Code. The Income Tax Department had recovered the amount on a suo-moto basis by way of appropriation of advance tax/TDS against some demand for FY 2016-17. The Resolution Professional requested for a refund, citing the moratorium provisions.

## Facts

The Corporate Insolvency Resolution Process (CIRP) was initiated against Nav Jyoti Agro Foods Pvt. Ltd. on 2019-02-12. A moratorium was imposed under Section 14 of the Insolvency and Bankruptcy Code. The Income Tax Department recovered Rs. 85,04,845/- on 2020-06-16 by appropriating advance tax/TDS. This recovery was made during the moratorium period. The Resolution Professional filed IA No. 307/2021 seeking a refund of the recovered amount. The Income Tax Department claimed a large outstanding demand of Rs. 71,70,17,298/- against the assessee and justified the recovery as an adjustment against this demand under Section 245 of the Income Tax Act. The corporate debtor was entitled to a refund of Rs. 85,04,845/- for the assessment year 2018-19 according to the intimation

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## Issues and analysis

### Issue 1: Whether the Income Tax Department is justified in recovering Rs. 85,04,845/- from the corporate …

**Ratio:** The Insolvency and Bankruptcy Code, specifically Section 14, imposes a moratorium that

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**Reasoning:** The court relied on the Supreme Court's observation in Company Ltd. Vs. M/S. Hotel

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**Interpretation:** The moratorium under Section 14 is intended to provide a breathing space for

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**Application:** The Income Tax Department's recovery of Rs. 85,04,845/- during the moratorium

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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) initiated against Nav Jyoti Agro Foods…
- **2019-03-26 — Resolution Professional…**: Resolution Professional appointed…

## 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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