NCLAT Upholds Denial of Entry Tax Exemption for Paradeep Phosphates

The National Company Law Appellate Tribunal (NCLAT) has rejected Paradeep Phosphates' appeal for entry tax exemption in Odisha. The tribunal ruled that the company's claim was time-barred and upheld the Odisha government's objections, which were previously denied by the National Company Law Tribunal.

The National Company Law Appellate Tribunal (NCLAT) has dismissed Paradeep Phosphates Ltd's petition seeking entry tax exemption in Odisha, under a rehabilitation scheme sanctioned by the Board for Industrial and Financial Reconstruction (BIFR). The decision follows the Cuttack bench of the National Company Law Tribunal's (NCLT) earlier ruling against the company.

Paradeep Phosphates, a key player in the fertilizer industry, pursued the tax relief under the Sick Industrial Companies Act provisions before the restructuring of legal frameworks with the introduction of the Insolvency and Bankruptcy Code (IBC) in 2016. The plea for tax concession was initially challenged and denied by the Odisha government, citing lack of policy support for distressed industrial entities.

This legal battle has seen multiple courtroom rounds, ultimately being upheld by NCLAT against Paradeep's claim of 'deemed consent' from the state. The panel consisting of Justice Ashok Bhushan and Member Barun Mitra observed shortcomings in the company's case, affirming that the limitations period for such tax exemption claims had lapsed.