NCLAT dismisses tax claim against Reliance Communication filed after insolvency initiation

The National Company Law Appellate Tribunal (NCLAT) has set aside a petition filed by the state tax department claiming dues from Reliance Communications saying the assessment was made after the initiation of insolvency resolution process against the debt-ridden firm. 

A two-member NCLAT bench upheld the earlier order passed by the Mumbai bench of the National Company Law Tribunal (NCLT), which had rejected the state tax department’s second claim of Rs 6.10 crore, PTI reported. 

Corporate Insolvency Resolution Process (CIRP) against Reliance Communication was initiated on June 22, 2019.  

The state tax department had filed two claims. The first claim was filed on July 24, 2019, for Rs 94.97 lakh while a second demand was sent on November 15, 2021, for Rs 6.10 crore, which arose out of an assessment order dated August 30, 2021. 

NCLT had admitted the first claim, which was passed before the initiation of CIRP. However, it rejected the second claim, which was based on an assessment order passed in 2021. 

The Committee of Creditors (CoC) of RCom approved the CIRP on March 2, 2020, and the subsequent claim was filed by the state tax department on November 15, 2021. 

The said order was challenged by the state tax department before the NCLAT contending that NCLT ought to have accepted the entire claim. 

However, it was also rejected by NCLAT observing that the subsequent claim was filed after the approval of the plan of CoC. It upheld the view taken by NCLT that delay in filing the second claim cannot be condoned, the report added. 

In December last year, NCLT Mumbai approved the sale of some of the real estate assets of telecom company Reliance Communications. 

The assets identified for sale include Chennai Haddow Office of RCom, comprising land and building; land parcel in Ambattur in Chennai spread over an area of about 3.44 acres; 871.1 square metres of land parcel in Pune; Bhubaneswar-based office space, investment in shares of Campion Properties and investment in shares of Reliance Realty.