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TMI Blog2005 (3) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... against the assets and properties of the petitioner-company pursuant to the notices issued from time to time; without obtaining prior consent from the Board for Industrial and Financial Reconstruction (BIFR), under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985. Factual matrix 3. The factual matrix reveals that the petitioners are an industrial unit having their factory and registered office at MIDC, Ambad, Nasik. The petitioner-company is engaged in the business of manufacture of polymer chemicals, mainly polyol and polyurethane systems; designs office-ware and other allied products. The operations of the company, were however, adversely affected from the financial year 1999-2000, resulting in complete er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under article 226 of the Constitution of India, to injunct respondent Nos. 3 and 4 from taking any coercive action against the assets and properties of the petitioner-company. Submissions 5. Learned counsel appearing for the petitioner submits that in terms of the judgment and decision of the Supreme Court in the case of Real Value Appliances Ltd. v. Canara Bank [1998] 93 Comp. Cas. 26 1, an enquiry by the BIFR can be deemed to have been commenced on registration of the company with the BIFR and accordingly, the provisions of section 22(1) of the SICA come into play from the date of registration of the reference. Accordingly, on commencement of the enquiry, no coercive action can be employed by any creditor for recovery of their dues with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dustrial health of the nation, section 22 of the Central Act requires all creditors seeking to recover their dues from sick industrial companies in respect of whom an enquiry under section 16 is pending or a scheme is under preparation or consideration or has been sanctioned, to obtain the consent of the Board to such recovery. If such consent is not secured and recovery is deferred, the creditor's remedy is protected for the period of deferment and is, by reason of section 22(5), excluded in the computation of the period of limitation. Therefore, the respondent State cannot recover the arrears of sales tax from the appellant-company without first seeking the consent of the Board in this behalf. 7. Learned counsel for the petitioner also p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment of the Apex Court in the case of Dy. CTO v. Corromandal Pharmaceuticals [1997] 89 Comp. Cas. 12 but also pressed into service para 13 of the judgment of the Apex Court in the case of Tata Davy Ltd. v. State of Orissa [1998] 93 Comp. Cas. 11 and submitted that the Apex Court has clearly distinguished the case of Gram Panchayat v. Shree Vallabh Glass Works Ltd. [1991] 71 Comp. Cas. 169. According to him, as per judgment in Dy. CTO v. Corromandal Pharmaceuticals [1997] 89 Comp. Cas. 1 2 case followed in Tata Davy Ltd. v. State of Orissa [1998] 93 Comp. Cas. 1 1, the amount of sales tax collected by the sick industry company after the date of sanctioned scheme if legitimately could belong to the revenue cannot be and could not have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] 89 Comp. Cas. 11 and observations made in para 13 of the subsequent judgment in the case of Tata Davy Ltd. v. State of Orissa [1998] 93 Comp. Cas. 12, the submissions advanced by Shri Pakale, appear to be reasonable and deserve acceptance at least with respect to recovery of dues of the central excise collected by the petitioner from its customers subsequent to the date of registration of the reference with the Board as the said amount of duty in the hands of the petitioner in the sum of Rs. 2,18,960 belongs to the revenue. As such, the amount collected cannot be and could not be intended to be within the sweep of section 22 of the SICA. 12. Since Shri Pakale having agreed not to insist on recovery of dues prior to June 2004, by adopting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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