The National Company Law Appellate Tribunal (NCLAT) on 20 March 2019 dismissed a batch of appeals in the matter of PR Director General of Income Tax (Admn & TPS) v Synergies Dooray Automotive Ltd & Ors, which claimed taxes to be an exception to the definition of operational debt under section 5(21) of the Insolvency and Bankruptcy Code, 2016 (IBC).
The NCLAT held that taxes were subsumed within the definition of operational debt and tax authorities were operational creditors under IBC.
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Section 5(21) of IBC: The appellants challenged section 5(21) of the IBC stating that the word or before the sentence a debt in respect of the payment of dues arising under any law for the time be…
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