Timeliness in filing claims under the Insolvency and Bankruptcy Code is crucial, and delays cannot be condoned absent sufficient justification.

ORDER

Delivered on: 20.03.2026

1. The present Interlocutory application has been filed Under section 42 of the Insolvency and bankruptcy code, 2016 (“ibc”) on 14.08.2025, challenging the decision dated 04.08.2025 passed by the Respondent/Liquidator rejecting the claim of the Applicant.

2. The Applicant is the Office of the Assistant Commissioner, CGST Division IV, Indore, acting through its authorised representative, whereas the Respondent is Shri Ishwari Lal Kalantri, Liquidator of Sagar Automobiles Pvt. Ltd.

Applicant’s case in brief:

3. It is submitted that this Adjudicating Authority, vide order dated 28.07.2023 in CP (IB) No. 37/MP/2021, ordered liquidation of M/s Sagar Automobiles Pvt. Ltd. and appointed Mr. Ishwari Lal Kalantri as Liquidator. In pursuance thereof, public announcement in Form B was issued on 08.08.2023 in accordance with Regulation 12 of the IBBI (Liquidation Process) Regulations, 2016, inviting claims from creditors, and the last date for submission of claims was 02.09.2023.

4. It is submitted that pursuant to public announcement made, the Applicant submitted its claim in Form B dated 12.07.2025, which was received by the Respondent on 14.07.2025, for an amount of Rs.13,95,44,088/-. Copy of claim dated 12.07.2025 is annexed as Annexure-1

5. It is submitted that the claim pertains to Service Tax dues amounting to Rs.2,26,88,079/-, out of which Rs.89,07,586/- was paid prior to the issuance of the Order-in-Original dated 31.05.2019 (OIO) and appropriated therein. The remaining amount of Rs.1,37,80,493/- is payable along with interest of Rs.10,30,75,516/- and penalty of Rs.2,26,88,079/-, for the period involved in FY 2013-14, 2014-15 and 2015-16. True copy of OIO dated 31.05.2019 is Annexed as Annexure-2 and Annexure–3 is the true copy of computation sheet.

6. It is submitted that the Respondent, vide email dated 04.08.2025, communicated rejection of the claim of the Applicant amounting to Rs.13,95,44,088/-. It is further stated that the Respondent/Liquidator rejected the Applicant's claim on the sole ground that it was filed approximately two years after the commencement of the liquidation process, and hence was term as "belated" Claim.

7. It is submitted by the applicant that in identical matter delay was condoned and Liquidator was directed to reconsider. The true copy of order of Hon'ble NCLAT in Canara Bank V. Commercial Tax Department Circle 09, Indore, Madhya Pradesh & Anr. company Appeal (AT) (Insolvency) No. 655 of 2023 is Annexed as Annexure-5.

8. It is submitted that Section 42 of the Insolvency and Bankruptcy Code, 2016 permits a creditor to prefer an appeal before the Adjudicating Authority against the decision of the Liquidator within fourteen days of receipt of such decision, and the present Application has been filed within the prescribed period of limitation. The true copy of authorization letter Annexed as Annexure-8.

9. It is submitted that the Respondent/Liquidator has rejected the claim without considering that Government dues such as Service Tax are statutory in nature and arise by virtue of lawful adjudication.

10. It is submitted that rejection of the claim solely on the ground of delay disregards the settled position that the Insolvency and Bankruptcy Code, 2016 does not extinguish genuine and lawfully adjudicated claims merely due to delayed filing, particularly in a situation where the liquidation process has not yet attained finality and that the Order-in- Original dated 31.05.2019 was not challenged and the same was reflected in the books of account of the Corporate Debtor.

11. It is further submitted that the Corporate Debtor participa