Statutory charges on assets created by operation of law for unpaid government tax dues do not equate to 'security interest' under the IBC, 2016; such dues are classified as 'government dues' subject to the waterfall mechanism in Section 53, and this is reinforced by the 2026 amendment to Section 3(31).

O R D E R

Per: Bidisha Banerje, Member (Judicial)

1. The Court convened in hybrid mode today.

2. The application IA (IB) 1540/KB/2024 has been filed by the Deputy Commissioner of Commercial Taxes & GST, C.T & GST Circle, Mayurbhanj, Odisha, seeking for the following prayers:

“1. The Hon'ble Tribunal may be pleased to admit the Petition and direct the Respondent to treat its claim under Secured Creditor and update the list of stakeholders accordingly.

2. The Hon'ble Tribunal may be pleased to pass any other orders as this Hon'ble Tribunal deems fit and proper in the interest of Justice.”

3. The application IA (IB) 1314/KB/2024 has been filed by the State Tax Officer-1, Unit-39, Vadodara, seeking for the following prayers:

“A. YOUR LORDSHIP MAY BE PLEASED TO allow this application.

B. YOUR LORDSHIP MAY BE PLEASED TO issue directions to the Liquidator to recognize the claim of the applicant as secured creditors and make payments to the applicants as receivable to the secured creditors in light of the decision of the Hon'ble Supreme Court.

C. YOUR LORDSHIP MAY BE PLEASED TO grant any other and further relief as may be deemed fit and proper in the facts of the present case.”

4. BRIEF BACKGROUND

4.1 The Corporate Debtor, M/s. Nicco Corporation Limited, carried out business activities in the State of Odisha and was registered under various state taxing statutes.

4.2 During the course of its business, the Corporate Debtor was assessed for dues under the Central Sales Tax (Orissa) Rules (CST Rules), and the Orissa Entry Tax (OET) Act, totalling an outstanding amount of Rs. 5,68,97,061/-.

4.3 The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor by this Tribunal on 18.01.2017. Due to the unavailability of a viable resolution plan, this Tribunal ordered the liquidation of the company on 17.10.2017, and appointed Shri Vinod Kothari, the Respondent herein, as the Liquidator.

4.4 Upon commencement of liquidation, the Liquidator issued public announcement for inviting claims from creditors, in terms of IBBI (Liquidation Process) Regulations, 2016 ("Liquidation Regulations") in four newspapers being 'Financial Express', 'Aaj Kal', 'Odisha Bhaskar' on 25th October, 2017 and 'Mumbai Mitra' on 26th October, 2017, wherein the last date for submission of claims was 22nd November, 2017.

4.5 Pursuant to the said public announcement, and claims received thereof, the list of stakeholders as on 17th October, 2017 was prepared and submitted to this Bench. The said list of stakeholders was also uploaded on the website of the Liquidator.

4.6 Long thereafter, the Deputy Commissioner of Commercial Taxes & GST, C.T & GST Circle, Mayurbhanj, Odisha, being the Applicant in present IA (IB) 1540/KB/2024, submitted its delayed claim in Form-C on 09.10.2020. While the Liquidator initially rejected the claim due to the delay, the present Applicant preferred IA 1298/2020 to seek condonation of delay. This Tribunal, in the said I.A. No. 1298/2020, condoned the delay on 09.12.2020, and directed the Liquidator to adjudicate the claim on its merits. On 17.04.2023, the Liquidator admitted the full claim of the said Deputy Commissioner under the head of "Government dues", effectively treating the Applicant as an Operational Creditor.

4.7 Similarly, the State Tax Officer-1 of Unit 39, Vadodara, being the Applicant in present IA (IB) 1314/KB/2024, lodged its delayed claim in Form-C on 23.11.2022, which was initially rejected by the Liquidator due to t