The Madras High Court has held that the acquisition of a corporate debtor as a going concern through liquidation does not entitle its new management to automatically escape GST liabilities by invoking the “clean slate” principle under the Insolvency and Bankruptcy Code, 2016.
The bench of Justice C. Saravanan, sitting at the Madurai Bench, distinguished a going-concern sale during liquidation from a successful corporate insolvency resolution process culminating in an approved resolution plan. The Court held that the purchaser acquires the corporate debtor’s assets and liabilities as a package under the regulatory framework governing such sales.
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The Court remitted the matter for fresh…