This website is only for informational purposes. Visitors are requested to note that the information is intended to be correct, complete, and up-to-date. Juris Corp does not warrant that the information contained on this website is accurate or complete, and disclaims any and all liability to any person for any loss or damage caused by errors or omissions, whether such errors or omissions result from negligence, accident or any other cause.
This website is not intended to be a source of advertising or solicitation. The reader must not consider the information contained herein to be an invitation for a lawyer-client relationship, must not rely on information provided herein and must seek independent advice. Transmission, receipt or use of any information on this website does not constitute or create a lawyer-client relationship. No recipients of content from this website should act or refrain from acting, based upon any or all of the contents of this website.
Furthermore, Juris Corp does not wish to represent anyone desiring representation based solely upon viewing this web site. Finally, the reader is warned that the use of e-mail for confidential or sensitive information is susceptible to inherent risks of lack of confidentiality associated with sending e-mail over the internet.
By clicking on the "I understand and agree" button below, the user acknowledges that:
We are not liable for any consequence of any action taken by the user relying on information provided under this website. In cases where the user has any legal issues, he/she must seek independent legal advice.
Brief Overview:
In the matter of Sundaresh Bhatt, Liquidator of ABG Shipyard Vs. Central Board of Indirect Taxes and Customs (Order dated 26.08.2022, Civil Appeal No. 7667 of 2021), the Apex Court has held that the Insolvency and Bankruptcy Code, 2016 (IBC), would prevail over the Customs Act, 1962, and once moratorium is imposed under the provisions of IBC, the Authority under the Customs Act would have a limited jurisdiction to assess/determine the quantum of customs duty and other levies.
Technical Details:
The noteworthy findings of the Apex Court, were inter alia as under:
(a) The Customs Act and the IBC act in their own spheres. In case of any conflict, the Code would override the Customs Act.
(b) Once the moratorium is imposed in terms of Sections 14 or 33(5) of the IBC, the Authority under the Customs Act would have a limited jurisdiction to assess/determine the quantum of customs duty and other levies. The Authority does not have the power to initiate recovery of dues by means of sale/confiscation, as provided under the Customs Act.
(c) After the aforesaid assessment, the Authority would have to submit its claims (concerning customs dues/operational debt) in terms of the procedure laid down, in strict compliance of the time periods prescribed under the IBC before the Adjudicating Authority.
Conclusion:
(a) The Authority under the Customs Act can only take steps to determine the tax, interest, fines, or any penalty which is due. However, the Authority cannot enforce a claim for recovery or levy of interest on the tax due during the period of moratorium, in violation of sections 14 or 33(5) of the IBC.
(b) The interim resolution professional, resolution professional or the liquidator, has an obligation to ensure that assessment is legal, and he has been provided with sufficient power to question any assessment, if he finds the same to be excessive.
https://main.sci.gov.in/supremecourt/2021/30527/30527_2021_1_1501_37723_Judgement_26-Aug-2022.pdf