9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (3) TMI 213 - HC - Companies LawRehabilitation scheme - demand on account of water cess payable by the petitioner, imposing the penalty of equivalent amount as well as interest - Held that - here in respect of an industrial company, amongst other things, a sanctioned scheme is under implementation then notwithstanding anything contained in any other law, no proceedings for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof and no suit for the recovery of money or for the enforcement of any security against or of any guarantee in respect of any loans or advances granted to the industrial company is to lie or be proceeded with further except with the express permission of the BIFR or the AAIFR as the case may be. As decided in Rishabh Agro Industries Ltd. v. P.N.B. Capital Services Ltd. 2000 (5) TMI 954 - SUPREME COURT OF INDIA that for successfully invoking the applicability of section 22 of the SICA, it has to be established that a sanctioned scheme is under implementation and it could not be said that despite the aforesaid situation the provisions of section 22 would not be attracted. Therefore, it is evident that the BIFR has permitted respondents Nos. 2 and 3 to accept the payment of water cess as based on actual discharge till the company was in operation as per past average. The payment has to be made over a period of 12 months from the date of sanction of the scheme and to waive the entire interest, penalty etc. This aspect has also been highlighted by the appellate authority in its order dated March 15, 2011 although it has been left to the wisdom of the assessing authority. Accordingly, the relief claimed by the petitioner is meritorious and deserves to be accepted even on this additional ground. The impugned order passed by the Assessing Authority for Cess-cum-Member Secretary, Haryana State Board for Prevention and Control of Water Pollution, under section 11 of the Water (Prevention and Control of Pollution) Cess Act, 1977 raising the demand of Rs. 8,16,851 on account of water cess payable is set aside. The respondents are directed to implement the rehabilitation scheme in so far as it concerns them and, as approved by the BIFR, vide order dated January 10, 2007 (P5). The needful shall be done within a period of one month from the date of receipt of a copy of this order.
Issues:
1. Challenge to order demanding water cess and penalties under the Water (Prevention and Control of Pollution) Cess Act, 1977. 2. Appeal against dismissal of appeal by the appellate authority under the Cess Act. 3. Implementation of rehabilitation scheme sanctioned by the Board for Industrial and Financial Reconstruction (BIFR). 4. Dispute over outstanding amount and potential action under the Cess Act. 5. Compliance with the rehabilitation scheme finalized by the BIFR and its impact on water cess dues. Issue 1: Challenge to Water Cess Order: The petitioner challenged an order dated September 13, 2000, demanding Rs. 8,16,851 as water cess, penalty, and interest under the Water (Prevention and Control of Pollution) Cess Act, 1977. Despite being declared a sick industrial company, the assessing authority raised the demand. An appeal was filed under section 13 of the Cess Act, emphasizing the protection under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). The appellate authority's order left the decision to the assessing authority, acknowledging the company's sick status. Issue 2: Appeal Dismissal under Cess Act: The appeal filed by the petitioner under section 13 of the Cess Act against the order dated September 13, 2000, was dismissed by the appellate authority on the merits. The authority recognized the company's sick status but maintained that the appeal did not lie in this case, leaving the matter for the assessing authority to consider. Issue 3: Implementation of BIFR Rehabilitation Scheme: The petition sought direction for the respondents to implement a rehabilitation scheme sanctioned by the BIFR on January 10, 2007. The scheme aimed at reviving the petitioner-company and required reassessment of demands by various authorities, including the Haryana State Pollution Control Board. The respondents' failure to accept the scheme's directions led to the petition challenging their actions. Issue 4: Outstanding Amount Dispute under Cess Act: A communication dated April 20, 2010, directed the petitioner to pay the outstanding amount of Rs. 23,83,120 before the sale of surplus assets to avoid action under the Cess Act. The petitioner contested this communication, leading to further legal proceedings. Issue 5: Compliance with BIFR Rehabilitation Scheme: The BIFR finalized a rehabilitation scheme for the petitioner-company on January 10, 2007, directing various authorities, including the Pollution Control Board, to reassess their demands considering the company's closure period. The scheme, approved in the presence of the Pollution Control Board's representative, required the waiver of interest, penalty, and charges for water cess based on actual discharge. The respondents' failure to appeal against the BIFR's order rendered the rehabilitation scheme binding on all parties involved. In conclusion, the High Court set aside the Assessing Authority's order dated September 13, 2000, and directed the respondents to implement the BIFR-approved rehabilitation scheme within one month. The judgment emphasized the binding nature of the rehabilitation scheme on all parties and the protection granted under the SICA for sick industrial companies.
|
