9911796707
TMI Blog2006 (7) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... ons) Act, 1985 (for brevity the SICA Act ). After appropriate enquiry, the BIFR declared by its order dated May 22, 2006 that the petitioner-company has become a sick industrial company as defined under section 3 of the SICA Act. It appears that a further enquiry under section 17 of the SICA Act is still pending before the BIFR and no final decision is taken by BIFR either to rehabilitate or wind up the petitioner-company, which are the two possible alternatives under the SICA Act. In the meanwhile, the first respondent-Deputy Commercial Tax Officer, Warangal, issued proceedings under section 25 of the Act dated January 23, 2006 proposing sale of property belonging to the petitioner-company specified in the said proceedings. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial measures should be afforded to a sick industrial company. In that behalf, BIFR is enabled to frame an appropriate scheme. To enable the BIFR to do so, certain preliminaries are required to be followed. It starts with the reference to be made by the board of directors of the sick company. The BIFR is directed to make appropriate inquiry as provided in sections 16 and 17 of the Act. At the conclusion of the inquiry, after notice and opportunity afforded to various persons including the creditors, the BIFR is to prepare a scheme which shall come into force on such date as it may specify in that behalf. It is in implementation of the scheme wherein various preventive remedial or other measures, are designed for the sick industrial compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility or amounts covered by the scheme will be taken in, by section 22 of the Act. So, we are of the view that though the language of section 22 of the Act is of wide import regarding suspension of legal proceedings from the moment an inquiry is started, till after the implementation of the scheme or the disposal of an appeal under section 25 of the Act, it will be reasonable to hold that the bar or embargo envisaged in section 22(1) of the Act can apply only to such of those dues reckoned or included in the sanctioned scheme. Such amounts like sales tax, etc., which the sick industrial company is enabled to collect after the date of the sanctioned scheme legitimately belonging to the Revenue, cannot be and could not have been intended to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not yet framed and the enquiry is still pending before the BIFR, the decision relied upon by the learned Government Pleader for Commercial Taxes, in our view, does not support the submission made by him. On the other hand, from the further observations made in the same paragraph on the basis of the facts of the case, we see that the Supreme Court only held that the amounts of taxes collected by the Sick Industrial Company after the sanctioned scheme are not covered by the embargo under section 22 of the SICA Act. The submission of the learned Government Pleader for Commercial Taxes is, therefore, liable to be rejected. However, we also make it clear that the embargo contained in section 22 of the SICA Act is not absolute and section 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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