Whether section 48 of the GVAT Act, 2003 override section 53 of the IBC?
INTRODUCTION Did you know that government secured debt can also be at the same level of priority as workman’s dues in the waterfall mechanism under the IBC? The recent Supreme court ruling in judgment State Tax Officer (1) Vs Rainbow Papers Limited [1] sheds light on this unexplored area of IBC jurisprudence. BRIEF HISTORY OF THE PARTIES Respondent was engaged in the business of manufacture and sale of Crafts and Oars within and outside the State of Gujarat. An amount of Rs.53,71,65,489/- was due from the Respondent to the Sales Tax authorities. On or about 8th July, 2016, recovery proceedings were initiated against the respondent, in respect of its dues for the year 2011- 2012, and the appellant attached the property of the respondent being land estate. The appellant filed a claim before the RP, claiming that Rs.47.36 crores was due and payable by the respondent to the appellant towards its dues under the GVAT Act. After admission of the CIRP and appointment of the RP, one Kushal Lim...