# In the matter of Varia Engineering Works Pvt. Ltd.

> NCLT judgment dated 2023-12-11. Citation: TCN-2023-NCLT-00319. Bank of Baroda initiated Corporate Insolvency Resolution Process (CIRP) against Varia…

- **Court:** NCLT
- **Order date:** 11 Dec 2023
- **Citation:** TCN-2023-NCLT-00319
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/varia-engineering-works-pvt-ltd-c5c477ea

## Summary

### Background

Bank of Baroda initiated Corporate Insolvency Resolution Process (CIRP) against Varia Engineering Works Private Limited under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016. The CIRP was initiated on 21.12.2017. Subsequently, an order for liquidation was passed on 22.07.2019, and a liquidator was appointed. The liquidator sold the assets of the Corporate Debtor through e-auctions. During these sales, TDS amounting to Rs. 28,92,101/- was deducted by the purchasers as per the Income Tax Act. The liquidator sought access to the Income Tax Portal of the Corporate Debtor, which was denied by the Deputy Commissioner of Income Tax. The liquidator argued that they are only required to prepare receipts and cannot file returns for the Corporate Debtor, leading to

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## Facts

1. Bank of Baroda initiated CIRP against Varia Engineering Works Private Limited under Section 7 of IBC in 2017 (CP(IB) No.149 of 2017).
2. CIRP was initiated on 21.12.2017.
3. Liquidation order was passed on 22.07.2019, and a liquidator was appointed.
4. The liquidator sold assets of the Corporate Debtor through e-auctions.
5. TDS of Rs. 28,92,101/- was deducted by purchasers as per Income Tax Act.
6. Liquidator's request for access to Corporate Debtor's Income Tax Portal was denied.
7. Liquidator argued they cannot file returns for the Corporate Debtor, leading to unclaimed TDS.
8. The Income Tax Department stated that Section 194-IA of Income Tax Act mandates TDS deduction and that the Income Tax Act is a fiscal provision.
9. The liquidator argued that Section 53 of IBC

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## Issues and analysis

### Issue 1: Whether the Income Tax Department is liable to refund the TDS deducted on the sale of assets of the …

**Ratio:** Section 238 of the IBC provides that the provisions of the IBC shall have overriding

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**Reasoning:** The NCLT reasoned that the IBC does not provide for the filing of any Income Tax Return

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**Interpretation:** This means that if there is a conflict between the IBC and any other law,

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**Application:** In this case, the NCLT applied this principle to hold that the provisions of

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## Parties

- **Judges:** Chitra Ha…; Velamur G Venkata…
- **Appellants:** Sunil Kumar…
- **Respondents:** Varia Engineering…; Chief Commissioner…
- **Advocates:** Vishal…; Pragati T…; +3 more

## Timeline

- **2017-12-21 — CIRP Init…**: CIRP was initiated against Varia…
- **2019-07-22 — Liquidation…**: Order for liquidation of the company was…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 35(1) — Powers and duties of liquidator](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-35)

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