9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2006 (7) TMI 603 - HC - VAT and Sales Tax
Issues:
1. Interpretation of section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA Act) regarding legal proceedings against a sick industrial company. 2. Whether recovery of taxes not included in a sanctioned scheme can proceed against a sick industrial company under the SICA Act. Analysis: 1. The primary issue in this case revolved around the interpretation of section 22 of the SICA Act, which prohibits legal proceedings against a sick industrial company without the consent of the Board of Industrial and Financial Reconstruction (BIFR) when an enquiry is pending. The petitioner, a limited company declared a sick industrial company by the BIFR, argued that no legal proceedings should be initiated against it due to the embargo under section 22 of the SICA Act. The court examined the Supreme Court's decision in Deputy Commercial Tax Officer v. Corromandal Pharmaceuticals, emphasizing that the embargo under section 22 applies only to amounts covered by a sanctioned scheme. Since no scheme had been framed in this case, and the enquiry was ongoing, the court held that the embargo was not absolute and could be subject to the BIFR's discretion based on the circumstances of the case. 2. The second issue involved whether the recovery of taxes not included in a sanctioned scheme could proceed against a sick industrial company under the SICA Act. The Government Pleader for Commercial Taxes argued that taxes not included in the scheme could still be recovered, citing the Supreme Court's decision. However, the court rejected this argument, emphasizing that the Supreme Court's decision only exempted taxes collected after the sanctioned scheme from the embargo under section 22. Since no scheme had been framed in this case, the recovery of taxes not covered by a scheme was not permissible. The court clarified that while the writ petition was allowed, the respondents could seek appropriate orders from the BIFR regarding the recovery of the tax arrears in question.
|
