August 16, 2018
Insolvency and Bankruptcy Code – In this recent case, the Supreme Court has categorically held that the provisions of the Insolvency and Bankruptcy Code, 2016 (Code) will override any enactment which is inconsistent with the provisions of the Code.
Case name: PR. Commissioner of Income Tax v. Monnet Ispat and Energy Ltd.
The Apex Court while referring to statutory provision under Section 238 of the Code held that the Code will override anything inconsistent contained in any other enactment, including the Income-Tax Act.
Section 238 of the Code states that the provisions of the Code shall override other laws.
In the foresaid context, the Supreme Court also made reference to its judgment in the case of Dena Bank vs. Bhikhabhai Prabhudas Parekh and Co. & Ors., to hold that income-tax dues, being in the nature of Crown debts, do not take precedence even over secured creditors, who are private persons.
A similar observation was made by the NCLAT in a recent case, whereby the Tribunal while referring to Apex Court’s judgment in the case of Innoventive Industries Ltd. v. ICICI Bank held that the provisions of the Code prevail over the provisions of the SARFAESI Act. Read here.
The entire case can be accessed here.