In an important, the Madras High Court has held that the Commercial Tax Department qualifies as a ‘secured creditor’ under the Insolvency and Bankruptcy Code ( IBC ) where statutory charges are created on the property of a corporate debtor.
Thus, directed the auction purchaser – petitioner, to recover its purchase consideration from the corporate debtor and remit the amount towards long-pending VAT ( Value added tax ) arrears of the Corporate debtor for vacating the attachment.
RLS Alloys Pvt. Ltd., the 3rd respondent which was ordered into liquidation by the National Company Law Tribunal (NCLT) in June 2019. The Commercial Taxes Department, represented by the Assistant Commissioner Srirangam (GST Circle), had earlier attached its…