Resolution Plan Approval under IBC extinguishes Past Tax claims/Demands: Bombay HC

The Bombay High Court ruled that once a resolution plan is approved under the Insolvency and Bankruptcy Code (IBC), it extinguishes past tax claims and demands. This decision is a significant clarification regarding the treatment of tax liabilities under the IBC framework, offering relief to companies undergoing insolvency proceedings. The court emphasized that once a resolution plan is approved, creditors, including tax authorities, cannot pursue previous claims, which provides finality to the insolvency resolution process.