JAIPRAKASH ASSOCIATES LIMITED vs. THE OFFICE OF THE COMMISSIONER OF CUSTOMS AIR CARGO COMPLEX IMPORT & ANR.

W.P.(C)-10387/2026HC Delhi02 September 202631 pages
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What were the facts?

The petitioner, Jaiprakash Associates Limited, imported Digital and Network Video Recorders on September 15, 2023. The Corporate Insolvency Resolution Process (CIRP) commenced against the petitioner on June 3, 2024. The Customs Department did not file any claim with the Resolution Professional (RP) during the CIRP. Despite the CIRP, the Additional Commissioner of Customs issued a Show Cause Notice on September 10, 2025, proposing to recover differential customs duty of Rs. 5,89,366/-, interest, and penalty. The Resolution Plan was approved by the NCLT on March 17, 2026. The petitioner informed the Customs Department about the approved Resolution Plan and the extinguishment of unfiled pre-CIRP claims. However, the Customs Authority passed an Order-in-Original on June 2, 2026, confirming the differential duty, interest, and penalty.

What did the High Court hold?

The Tribunal held that the Impugned Order could not be sustained. The primary reasoning was that the Insolvency and Bankruptcy Code, 2016 (IBC), specifically Section 31(1) and Section 238, gives precedence to an approved Resolution Plan. Once the Resolution Plan was approved by the NCLT on March 17, 2026, and the petitioner had duly notified the Customs Department of this fact and the relevant clause extinguishing unfiled pre-CIRP claims, the Customs Department could not proceed to enforce a pre-CIRP claim that had not been submitted during the CIRP and stood extinguished under the Resolution Plan. The Tribunal emphasized that the IBC's objective is to allow the successful resolution applicant to commence business on a 'clean slate', and allowing creditors to bypass the CIRP and enforce claims later would defeat this purpose. The failure of the Customs Department to submit its claim within the prescribed timelines could not prejudice the Corporate Debtor or the Resolution Applicant. The Tribunal clarified that this decision did not negate the applicability of the Customs Act but addressed the consequence of the IBC on claims arising prior to the Insolvency Commencement Date after the approval of a Resolution Plan. The merits of the classification and duty computation were rendered academic.

What were the issues?

1. Whether the Customs Department, having failed to submit its claim during the CIRP, could enforce a pre-CIRP liability against the petitioner after the approval of the Resolution Plan under Section 31 of the Insolvency and Bankruptcy Code, 2016 (IBC)? Assessee's arguments: The petitioner argued that the liability pertained to a pre-CIRP transaction. Since the Customs Department did not file a claim with the RP, and the Resolution Plan was approved under Section 31 of the IBC, all unfiled pre-CIRP claims stood extinguished. The approved Resolution Plan, being binding on all stakeholders including governmental authorities as per Section 31(1) and Section 238 of the IBC, precluded any subsequent enforcement of such extinguished claims. They relied on Clause 4.12.1 of the Resolution Plan and the principles of IBC regarding a 'clean slate'. Revenue's arguments: The respondents contended that the Customs liability was not shown to have been placed before or dealt with by the RP, CoC, or NCLT. They argued that mere reliance on the NCLT order approving the Resolution Plan was insufficient without proof that the subject customs liability was considered. The pendency of CIRP was brought to their notice only at the final personal hearing stage.

Which sections of the Income-tax Act were involved?

Section 28(1),Section 28AA,Section 117,Section 112(a)(ii),Section 31(1),Section 238,Section 7,Section 30(6)

AI-generated summary — verify with the full judgment below

W.P.(C) 10387/2026 $~ * IN THE HIGH COURT OF DELHI AT NEW DELHI %

Judgment reserved on: 18.08.2026 Judgment pronounced on: 02.09.2026

Judgment uploaded on: 02.09.2026 # CNR No. DLHC010334532026 + W.P.(C) 10387/2026 and CM APPL. 48073/2026

JAIPRAKASH ASSOCIATES LIMITED

.....Petitioner Through: Mr. Gauhar Mirza, Mr. Syamantak Sen, Mr. Kaveesh Nair, Mr. Jeetendra Vishwakarma & Mr. Tanay Khanna, Advs.

versus THE OFFICE OF THE COMMISSIONER OF CUSTOMS AIR CARGO COMPLEX IMPORT & ANR. .....Respondents

Through: Ms. Anushree Narain, SSC with Mr. Apurv Yadav and Mr. Naman Choula, Advs.

CORAM:

HON'BLE MR. JUSTICE ANIL KSHETARPAL

HON'BLE MS. JUSTICE SHAIL JAIN J U D G M E N T ANIL KSHETARPAL, J.:

1.

The present Writ Petition under Article 226 of the Constitution of India has been preferred by the Petitioner, Jaiprakash Associates Limited, seeking quashing of Order-in-Original No.23/2026-27/ACC Import/2789 dated 02.06.2026 [he

The order continues below.

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