Legal principle

Once a resolution plan is approved by the NCLT under Section 31(1) of the IBC, a pending tax appeal stands concluded and the Tribunal loses jurisdiction, becoming functus officio, unless the approved resolution plan specifically provides for continuation of that appeal.

Court decision

The Tribunal disposed of the appeal without deciding it on merits, holding that on approval of the resolution plan under Section 31(1) of the IBC the present proceedings could not be continued before it; since the resolution plan does not specifically provide for continuation of the appeal, the appeal stands concluded by operation of law under the IBC and the Tribunal becomes functus officio. The appellant's request to treat the appeal as disposed was effectively accepted, with no merits adjudication of the disputed dues for either side.

Facts

Aircel Limited had a pending Service Tax Appeal No. 41263 of 2017 before the CESTAT Chennai against Order-in-Appeal No. CMB-CEX-000-APP-059-17 dated 02.03.2017 passed by the Commissioner of Customs, Central Excise and Service Tax (Appeals-I), Coimbatore, contesting statutory dues owed to the Central Government; the extract does not identify the goods, services or amounts in dispute. During the pendency of the appeal, insolvency proceedings in CP (IB) No. 298/2018 led the NCLT, Mumbai Bench-II, to approve on 09.06.2020 a resolution plan submitted by UV Asset Reconstruction Company Limited for Aircel Limited and affiliated corporate applicants (Dishnet Wireless Ltd. and Aircel Cellular Ltd.) under Section 30(6) read with Section 31(1) of the IBC. Aircel's counsel accordingly requested the Tribunal to treat the appeal as disposed, producing the NCLT order and earlier Tribunal Final Order Nos. 40633-40642/2025 in similar circumstances.

Key provisions

• Section 129B, Customs Act, 1962 —  Orders of Appellate Tribunal