GST Dept cannot issue Tax Demand Against Corporate Debtor: Bombay HC sets aside GST Demand

The Bombay High Court set aside a GST demand against a corporate debtor in a liquidation proceeding, ruling that the GST department cannot issue tax demands against companies undergoing insolvency proceedings under the Insolvency and Bankruptcy Code (IBC). The court held that once a corporate debtor is in liquidation, the GST department must seek permission from the liquidation authorities before pursuing any tax claims. This judgment reaffirms the priority of the IBC process over tax demands and provides clarity on the treatment of tax obligations in insolvency proceedings. It is a significant ruling that may impact future cases involving corporate debtors undergoing liquidation, ensuring that the IBC framework takes precedence over competing claims from other authorities.