Karnataka High Court: Tax Demands Raised After IBC Resolution Plan Not Enforceable

The Karnataka High Court held that tax demands issued by authorities after the approval of a resolution plan under the Insolvency and Bankruptcy Code (IBC) are not legally enforceable.

The Court underscored that once a resolution plan is approved, it binds all stakeholders, including tax authorities.

The Court held that allowing fresh claims would have undermined the purpose of the Insolvency and Bankruptcy Code, which aimed to grant the resolved entity a clean slate while securing finality and certainty for successful resolution applicants.

[OLIVE LIFESCIENCES PRIVATE LIMITED v UNION OF INDIA AND ORS]