NCLT Guwahati Dismisses Department's Sapphire Suppliers Restoration Plea, Says NCLAT Appeal Pending

The National Company Law Tribunal (NCLT) at Guwahati has dismissed the Income Tax Department's petition seeking restoration of Sapphire Suppliers Private Limited, holding that the issue was already pending before the National Company Law Appellate Tribunal (NCLAT) and that proceeding with the petition could lead to conflicting decisions and multiplicity of proceedings.

A Bench of Judicial Member Rammurti Kushawaha and Technical Member Yogendra Kumar Singh held that the petition should not be decided until the pending appeal before the NCLAT attains finality. It held:

“…this Tribunal is of the considered opinion that the present proceedings ought not to be decided till the Appeal pending before the Hon'ble NCLAT attains finality.”

The Income Tax Department had sought restoration of the company's name, which was struck off from the Register of Companies, to enable it to pursue tax-related proceedings.

The Department submitted that assessment proceedings for Assessment Years 2010-11, 2011-12, 2012-13 and 2014-15 had resulted in substantial tax demands and penalties against the company.

The Registrar of Companies (ROC) informed the Tribunal that Sapphire Suppliers had filed e-Form STK-2 declaring nil assets and liabilities and that its name was struck off on 17 September 2020. The ROC also pointed out that the Tribunal had dismissed an earlier petition seeking restoration in 2023 and that an appeal against that order was pending before the NCLAT.

The ROC further submitted that Section 248(7) of the Companies Act, 2013, which preserves the liability of a company's directors, officers and members despite its dissolution, allows such liability to be enforced without restoring the company. It therefore left the question of restoration to the Tribunal.

The Tribunal noted that although the NCLAT appeal had been filed by different parties, the principal issue in both proceedings was the restoration of Sapphire Suppliers' name. It observed:

“In view of the fact that the issue of restoration of the same Company is already under consideration before the Hon'ble National Company Law Appellate Tribunal, this Tribunal is of the considered view that adjudication of the present Petition at this stage may result in conflicting decisions and it may give rise to inconsistent orders and unnecessary multiplicity of proceedings.”

The Bench observed that judicial propriety and discipline required it to refrain from deciding the petition while the appeal concerning restoration remained pending before the NCLAT.

Accordingly, the NCLT dismissed the petition and granted the Income Tax Department liberty to pursue such remedies as may be available in law after the NCLAT proceedings attain finality.

For Applicants: Advocate Siddharth Sancheti