# In the matter of Southern Batteries Pvt. Ltd.

> NCLT judgment dated 2024-08-02. Citation: TCN-2024-NCLT-00890. The case involves an application filed by the liquidator of Southern Batteries Pvt. Ltd.,…

- **Court:** NCLT
- **Order date:** 2 Aug 2024
- **Citation:** TCN-2024-NCLT-00890
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/southern-batteries-pvt-ltd-af6a3d5c

## Summary

### Background

The case involves an application filed by the liquidator of Southern Batteries Pvt. Ltd., seeking a direction to the Income Tax Department to refund the amount of Rs.1,20,50,000/- paid as TDS on the liquidation auction sale of the corporate debtor's assets. The corporate debtor was ordered to be liquidated on March 2, 2023. The liquidator announced the 4th e-auction of the corporate debtor's assets on January 12, 2024, where Godha Realtors emerged as the successful auction purchaser. After deducting TDS, Godha Realtors paid the balance e-auction sale consideration. The Income Tax Department filed objections to the refund.

## Facts

Southern Batteries Pvt. Ltd. was ordered to be liquidated on March 2, 2023. Shri Kanekal Chandrasekhar was appointed as the liquidator. The liquidator conducted an e-auction of the corporate debtor's assets on January 12, 2024. Godha Realtors emerged as the successful bidder with a bid of INR 127.50 crore. Godha Realtors paid Rs.1,20,50,000 as TDS. The results of the auction were announced on January 13, 2024, and a demand letter was issued to Godha Realtors on January 17, 2024. Godha Realtors paid the balance e-auction sale consideration of INR 126,29,50,000 after TDS deduction. The liquidator filed an application under Section 60(5) of the IBC, 2016, seeking a refund of the TDS amount. The Income Tax Department filed objections on July 22, 2024.

## Issues and analysis

### Issue 1: Whether the Income Tax Department is required to refund the TDS amount deducted from the sale of …

**Ratio:** Section 53 of the IBC provides a “non-obstante clause” and has an overriding effect over

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**Reasoning:** The NCLT relied on the order passed by the Hon'ble NCLAT in the matter of Om Prakash

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**Interpretation:** Section 53 of the IBC is interpreted to prioritize the distribution of

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**Application:** The ratio and reasoning are applied to the specific facts of the case, where

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## Parties

- **Judges:** K. Bi…; Manoj Kumar…
- **Appellants:** Kanekal Chandrasek…
- **Respondents:** Southern Batteries…; Chief Commissioner…

## Timeline

- **2023-03-02 — Liquidation…**: Corporate Debtor was…
- **2023-12-14 — Public Notice of…**: Liquidator announced the 4th e-auction…

## 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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