SBICAP Trustee Company Ltd. and State Bank of India and Axis Bank Limited and Bank of Baroda and Corporation Bank and The Federal Bank Limited and IDBI Bank Limited and Indian Overseas Bank and Punjab & Sind Bank and Punjab National Bank and State Bank of Mysore and UCO Bank and United Bank of India and J.M. Financial Asset Reconstruction Co. Pvt. Ltd. V. Assistant Commissioner of Service Tax Division III and Deputy Commissioner of Service Tax and Additional Commissioner of Service Tax and Commissioner of Service Tax and Union of India and Kingfisher Airlines Limited and MESCO Aero Space Ltd.

RP/373/2017

AI Insights

The case involves a series of review petitions filed by SBICAP Trustee Company Ltd. and others against the Assistant Commissioner of Service Tax and others, concerning the precedence of tax liabilities over secured creditors in the context of the winding up of Kingfisher Airlines Limited (KFAL). The original writ petitions were dismissed based on the winding up order of KFAL, which was believed to render the issues concerning the tax liabilities and the rights of secured creditors moot. However, upon review, the court found that the writ petitions deserved to be reconsidered independently of the winding up order and thus recalled the earlier decision, restoring the petitions for a new hearing.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 813024 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 16-10-2017
• Assessment Year: misc
• Laws Referred To: Code of Civil Procedure, 1908
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JEEVAN NEERALGI
• Assessee Lawyers: S S NAGANAND
• Keywords: Income Tax Liability; Secured creditors; Service Tax Liability; Winding up
• Section: 114; 1; XLVII

Judgement Text

" 1/9 IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE 16th DAY OF OCTOBER, 2017 BEFORE THE HON'BLE Dr.JUSTICE VINEET KOTHARI REVIEW PETITION Nos.373 OF 2017 & 479-491 OF 2017 IN WRIT PETITION Nos.19727/2014 & 30777-30789/2014 (T-RES) Between: 1. SBICAP Trustee Company Ltd. No.8, 5th Floor, Khetan Bhavan 198 Jamshedji Tata Road, Churchgate, Mumbai – 400 020 Represented by Authorized Officer Mr. R. Lakshminarayana Rao. 2. State Bank of India A Banking Corporation Constituted Under the State Bank of India Act, 1955 (23 of 1955) Having its Corporate Centre at State Bank Bhavan Madame Cama Road Nariman Point Mumbai – 400 021. And having its Stressed Asset Management Branch at, 2nd Floor, Office Complex Building, Local Head Office Compound, #65, ST. Marks Road, Bengaluru-560001. Date of Order 16-10-2017 R.P.Nos.373/2017 & 479-491/2017 SBICAP Trustee Company Ltd. & Others. Vs. Assistant Commissioner of Service Tax & Others. 2/9 3. Axis Bank Limited, A Company incorporated under the Companies Act, 1956 and A banking company within the Meaning of Section 5(c) of the Banking Regulation Act, 1949 and Having its registered office at Trishul, Third Floor Opp. Samartheswar Temple Law Garden, Ellisbridge Ahmedabad 380 006, Gujarat, India. And having its corporate office at Axis House, C-2, Wadia International Centre Pandurang Budhkar Marg Worli, Mumbai – 400 025. 4. Bank of Baroda A body corporate under the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970 (5 of 1970), Having its head office at Baroda House, P.B.No.506, Mandavi Vadodara – 396 006. Acting through its Branch Office at P.O.Box 11745 Samata Building General Bhosale Marg Nariman Point, Mumbai -400 021 5. Corporation Bank A body corporate under Banking Companies (Acquisition and Transfer of Undertaking) Act, 1980 (40 of 1980) Having its Corporate office at Mangaladevi Temple Road Pandeshwar, Mangalore – 575 001 Date of Order 16-10-2017 R.P.Nos.373/2017 & 479-491/2017 SBICAP Trustee Company Ltd. & Others. Vs. Assistant Commissioner of Service Tax & Others. 3/9 And having its Industrial Finance Branch at Rallaram Memorial Bldg. 1st Floor, CSI Compound Mission Road, Bengaluru – 560 027. 6. The Federal Bank Limited A Company within the Meaning of the Companies Act, 1956 Having its registered office at Federal Towers Aluva – 683 101, Kerala. And having its branch office at St. Marks Road, 9, Halcyon Complex St. Marks Road, Bengaluru – 560 001. 7. IDBI Bank Limited A company incorporated Under the Companies Act, 1956 and A banking company within the Meaning of the Banking Regulation Act, 1949, having its head office at IDBI Tower, WTC Complex Cuffe Parade, Mumbai – 400 005 Maharashtra, India. And acting through its branch Office at Corporate Banking Group-FAMG, 9th Floor, IDBI Tower WTC Complex, Cuffe Parade Colaba, Mumbai – 400 005. 8. Indian Overseas Bank A body corporate under the Banking Companies (Acquisition And Transfer of Undertaking) Act, 1970 Having its central office at 763, Anna Salai, Chennai – 600 002. And its branch office at ‘Harikripa’, 26-A, S.V.Road Date of Order 16-10-2017 R.P.Nos.373/2017 & 479-491/2017 SBICAP Trustee Company Ltd. & Others. Vs. Assistant Commissioner of Service Tax & Others. 4/9 Santacruz (W), Mumbai-400 054. 9. Punjab & Sind Bank A body Corporate under Banking Companies (Acquisition and Transfer of undertaking) Act, 1980 Having its Head Office at 21 Rajendra Place, New Delhi – 110 008 And having amongst others A branch office at J.K.Somani Building British Hotel Lane, Fort, Mumbai – 400 023. 10. Punjab National Bank A body Corporate under the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970 (5 of 1970) Having its head office at 7 Bhikaji Cama Place New Delhi – 110 607 Acting through its Large Corporate Branch at Centenary Building, 28, M.G.Road, Bengaluru – 560 001. 11. State Bank of Mysore A body Corporate Constituted Under the State Bank of India (Subsidiary Banks) Act, 1959 Having its head office at Kempe Gowda Road Bengaluru – 560 009 And its Corporate Accounts Branch At No.18, Ramanashree Arcade M.G.Road, Bengaluru – 560 001 Date of Order 16-10-2017 R.P.Nos.373/2017 & 479-491/2017 SBICAP Trustee Company Ltd. & Others. Vs. Assistant Commissioner of Service Tax & Others. 5/9 12. UCO Bank A body Corporate Constituted Under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and having its head office at 10 BTM Sarani, Kolkata – 700 001 West Bengal, India And its Branch office at 1st Floor, 13/22, K.G.Road Bengaluru – 560 009. 13. United Bank of India A body Corporate under the Banking Companies (Acquisition and Transfer of undertakings) Act, 1970 (5 of 1970) having its head office at 11, Hemanta Basu Sarani Kolkata – 700 001 Acting through its branch office At 40, K.G.Road, Bengaluru – 560 009. 14. J.M. Financial Asset Reconstruction Co. Pvt. Ltd. Having its registered office at 7th Floor, Cnergy Appasaheb, Marathe Marg Prabhadevi, Mumbai – 400 025 (Inserted as per Order dated 26.08.2015) Petitioner Nos.2 to 14 Represented by: Mr. Debasish Bhattacharjee Age 54 years S/o. Late Sukumar Assistant General Manager & Case Lead Officer-6 State Bank of India, having its Date of Order 16-10-2017 R.P.Nos.373/2017 & 479-491/2017 SBICAP Trustee Company Ltd. & Others. Vs. Assistant Commissioner of Service Tax & Others. 6/9 Stressed Asset Management Branch, 2nd Floor Office Complex Building Local Head Office Compound #65, St. Marks Road, Bengaluru-560001. …Petitioners (By Mr. S. S. Naganand, Sr. Counsel for Mr. Shrikara P.K., Advocate) And: 1. Assistant Commissioner of Service Tax Division III, having office at 2nd Floor Madhu Industrial Estate PB Marg, Worli, Mumbai-400 013. 2. Deputy Commissioner of Service Tax Having office at 2nd Floor Madhu Industrial Estate, PB Marg Worli, Mumbai-400 013. 3. Additional Commissioner of Service Tax 2nd Floor, Mahu Industrial Estate Worli, Mumbai-400013. 4. Commissioner of Service Tax 16/1, Service Tax Commissionerate SP Complex Lalbah Raod Bengaluru-560027. 5. Union of India Department of Revenue Ministry of Finance Government of India New Delhi – 110 001. 6. Kingfisher Airlines Limited A public limited company Incorporated under the Date of Order 16-10-2017 R.P.Nos.373/2017 & 479-491/2017 SBICAP Trustee Company Ltd. & Others. Vs. Assistant Commissioner of Service Tax & Others. 7/9 Companies Act, 1956 & Having its registered office at UB Tower, Level 12 UB City, 24, Vittal Mallya Road Bengaluru – 560 001. 7. MESCO Aero Space Ltd., D-12, Freedom Fighters Enclave Neb Sarai, New Delhi-110068 Rep. by its Chief Operate Officer M.R. Manoj Pande. ...Respondents (By Mr. Jeevan J. Neeralgi, Advocate for R1 to R5) **** These Review Petitions are filed under Section 114 R/W Order XLVII Rule 1 of the Code of Civil Procedure, 1908, praying to review the order dated 06/07/2017 passed in W.P.Nos.19727/2014 & W.P.Nos.30777-30789/2014 (T- IT), on the file of the Hon’ble High Court of Karnataka, Bengaluru & etc., These Review Petitions coming on for Admission this day, the Court made the following:- O R D E R Mr. S.S.Naganand, Sr. Counsel for Mr. Shrikara P.K., Adv. for Petitioners Mr. K.V.Aravind, Adv. for Respondents. 1. The learned counsels at the Bar fairly submitted that the issue involved in these Writ Petitions which were disposed of by the order dated 06/07/2017 Date of Order 16-10-2017 R.P.Nos.373/2017 & 479-491/2017 SBICAP Trustee Company Ltd. & Others. Vs. Assistant Commissioner of Service Tax & Others. 8/9 was really between the Secured Creditors, SBICAP Trustee Company Ltd., etc., the present Review Petitioners before the Court and the issue involved was relating to the Service Tax Liability and Income Tax Liability as to whether the Income Tax liability and Service Tax Liability of the Company ordered to be wound up on 18/11/2016 namely, Kingfisher Airlines Limited (KFAL) would take precedence over the Secured Creditors, the present petitioners or not, since the Secured Creditors were standing out of the liquidation. 2. In view of this, the order passed by this Court dated 06/07/2017, dismissing these writ petitions as not surviving for consideration in view of the winding up order passed by this Court in respect of Kingfisher Airlines Limited (KFAL) on 18/11/2016 deserves to be recalled and the present Writ Petitions deserve to be decided on their own merits. 3. The said order dated 06/07/2017 dismissing the Writ Petition No.19727/2014 & 30777-30789/2014 Date of Order 16-10-2017 R.P.Nos.373/2017 & 479-491/2017 SBICAP Trustee Company Ltd. & Others. Vs. Assistant Commissioner of Service Tax & Others. 9/9 (SBICAP Trustee Company Limited and others Vs. Tax Recovery Officer and others) is accordingly recalled. 3. The said Writ Petitions are restored to their original Numbers and position. 4. The learned counsel for the review petitioners prays for hearing of the said Writ Petitions after a period of four weeks. 5. Post the said Writ Petitions after four weeks, as prayed. 6. Accordingly, the present Review Petitions stand disposed of. Sd/- JUDGE BMV* "