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Issues:
Challenge to coercive recovery action for excise duty and interest by respondent No. 4, Seeking directions against respondent Nos. 3 and 4 to refrain from coercive actions without BIFR consent. Analysis: The petitioners, an industrial unit facing financial difficulties, challenged coercive recovery actions by respondent No. 4 for excise duty and interest. They sought directions against respondents to refrain from such actions without consent from the Board for Industrial and Financial Reconstruction (BIFR) under the Sick Industrial Companies (Special Provisions) Act, 1985. The petitioners highlighted their industrial operations' adverse impact, leading to accumulated losses and a reference under SICA. They argued that Section 22(1) of SICA prohibits coercive actions during BIFR proceedings. The petitioner's counsel relied on legal precedents, including Real Value Appliances Ltd. v. Canara Bank, Tata Davy Ltd. v. State of Orissa, and Gram Panchayat v. Shree Vallabh Glass Works Ltd., emphasizing the need for BIFR consent before creditor recovery from sick industrial companies. Respondent's counsel, however, cited Dy. CTO v. Corromandal Pharmaceuticals to argue that post-scheme tax collections are not covered by SICA. The court considered these arguments, allowing recovery of excise duty collected post-BIFR registration, as it belongs to the revenue and is not protected by SICA. The court accepted the respondent's agreement not to pursue dues predating June 2004 coercively. Consequently, the petition was partly allowed, permitting recovery of excise duty post-BIFR registration from June 2004 onwards. The judgment emphasized that the petitioner cannot claim SICA protection for revenue-held amounts post-BIFR registration. The court clarified that recovery actions for dues pre-BIFR registration could be addressed in future cases if necessary. Overall, the court partially allowed the petition, enabling recovery post-BIFR registration but not for the prior period, with no costs awarded.
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