NCLT Dismisses Instakart's Claim for Rs. 86.6 Lakhs in GST Liability Against TopsGurp Services

Instakart's appeal rejected due to delayed filing and lack of requisite documents as GST Department's claim already accepted.

The National Company Law Tribunal (NCLT), Mumbai Bench, has dismissed the claim of Instakart Services Private Limited, amounting to Rs. 86,60,659, against TopsGurp Services and Solutions Limited. The claim, filed under Section 42 of the Insolvency and Bankruptcy Code, 2016, was made on account of alleged GST liabilities arising from the Corporate Debtor's failure to correctly file GST returns.

Instakart, operating in the logistics sector, had entered into a service agreement with TopsGurp for security and related services. The agreement stipulated that TopsGurp was responsible for fulfilling tax obligations, including GST. However, due to TopsGurp's default in filing necessary GST returns, Instakart claimed it was denied Input Tax Credit (ITC) and sought recovery of the GST amount paid.

The Tribunal noted that the GST Department had already filed and admitted a claim for Rs. 17,69,25,165 against the Corporate Debtor, which included GST liabilities. Consequently, Instakart's separate claim for the same liability was deemed inadmissible. The NCLT highlighted that the Appellant's claim was further weakened by an 11-day delay in filing and the absence of essential documents, such as a GST notice or relevant filings like DRC-03 and GSTR-3B, requested by the Liquidator.

The Liquidator, Mr. Anshul Gupta, had previously rejected Instakart's claim for these reasons. Despite reminders and communications from Instakart, the Liquidator maintained the position that the claim could not be substantiated without the necessary documentation.

The Tribunal's decision emphasized that the statutory duty of GST remittance rests with the supplier, and any default by the Corporate Debtor must be addressed by the GST Department, which has already initiated recovery proceedings. The assets of TopsGurp, sold as a 'going concern,' are in the distribution phase, further complicating late claims.

Instakart's attempt to offset its alleged GST liability against its admitted dues to TopsGurp was also dismissed, with the Tribunal upholding the Liquidator's demand for the payment of Rs. 79,74,169 owed by Instakart, with interest.

The judgment underscores the importance of timely and complete documentation in insolvency claims and clarifies the role of statutory bodies in tax recovery during corporate liquidation.

Bottom Line:

Insolvency and Bankruptcy Code, 2016 - A claim for GST liability arising from the Corporate Debtor's default cannot be admitted if the supplier has already filed its claim and the recipient fails to provide requisite documents.

Statutory provision(s): Insolvency and Bankruptcy Code, 2016 Section 42, GST Act Section 50(3).

Instakart Services Private Limited v. Mr. Anshul Gupta, (NCLT)(Mumbai Bench) : Law Finder Doc Id # 2812918