A buyer is being sought for the troubled Liberty Bell Bay in northern Tasmania, which went into voluntary administration in March.
The smelter, which was a subsidiary of GFG Alliance, owned by controversial businessman Sanjeev Gupta, has been sitting idle for almost 12 months.
Corporate regulator ASIC announced on Thursday it had dropped Supreme Court action taken against Liberty Bell Bay over an alleged failure to lodge tax returns over five financial years.
As part of the legal action lodged in March, the regulator applied to wind up the smelter and accused it of failing to abide by a court ruling to provide tax returns.
The court proceedings had been "discontinued", the regulator said in a statement.
"Administrators have since been appointed to the company," it said.
"Consequently, its obligations to comply with its financial reporting requirements have been deferred as the administration takes its course."
The future of some 200 workers employed at the smelter remains in limbo as administrator Ernst and Young tries to find a buyer.
On April 22, the federal and state governments announced a $3 million loan to guarantee wages for three weeks after the administrators said they would run out of money to pay 175 workers.
Ernst and Young has previously indicated there are a dozen potential buyers for the smelter, which produces an alloy to strengthen steel.
The smelter's operations have been under a cloud for some time.
In August, the Tasmanian government loaned Liberty Bell Bay $20 million to purchase ore so it could resume operations.
But when operations didn't resume, the government appointed receivers and managers in January to protect the ore stockpile.
Federal Industry Minister Tim Ayres said GFG Alliance had run down the facility but it remained efficient and markets and customers were willing to buy its products.
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