9911796707
TMI Blog2004 (2) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... without first obtaining consent of the BIFR as provided in section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985. - - - - - Dated:- 5-2-2004 - Judge(s) : M. S. SHAH., A. M. KAPADIA. JUDGMENT The judgment of the court was delivered by M.S. Shah J. -Heard Mr. S.N. Soparkar, learned counsel for the petitioner, and Mr. D.D. Vyas, learned standing counsel for the respondent authorities on the question of interim relief. Mr. Soparkar, learned counsel for the petitioner, has submitted that in view of the provisions of section 226(3) of the Income-tax Act, 1961 ("the Act" for short) which are analogous to the provisions of section 46(5A) of the Indian Income-tax Act, 1922, and the decision of the apex court in IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner to Madura Coats Limited and the petitioner is entitled to get the said amount from Madura Coats Limited. It is, therefore, prayed that interim relief as prayed for may be granted and the respondents may be restrained from enforcing the impugned notice under section 226(3) of the Act (annexure A) and from acting upon the impugned order dated January 16, 2004 (annexure F). Mr. Soparkar submits that if protection as prayed for is not granted, Madura Coats Limited would not like to continue business with the petitioner and the petitioner will never be able to make any recovery. If it is allowed to make recovery, it will be able to give employment to about 400 people. On the other hand, Mr. D.D. Vyas, learned counsel for the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt to coercive recovery. As regards reliance placed by Mr. Vyas on the decision in Corromandal Pharmaceuticals [1997] 89 Comp Cas 1 (SC), that was a case where the sick company was recovering sales tax from the purchasers of its goods and the hon'ble Supreme Court observed that although section 22 of the SICA has wide import, it will be reasonable to hold that the bar or embargo envisaged therein can apply only to such of those dues reckoned or included in sanctioned scheme. 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 be covered within section 22 of the Act. When a sick c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xes and the like dues from sick industrial companies that satisfy the conditions set out in section 22(1) of the SICA cannot be recovered by coercive process unless the said BIFR gives its consent thereto. That is what the respondents can do in the instant case also, i.e., the respondents can obtain consent from the BIFR for recovery that they propose to make. In view of the above discussion, we grant interim relief restraining the respondent-authorities from acting upon the impugned notice dated October 20, 2000 (annexure A), and also restraining the respondent authorities from enforcing any notice under section 226(3) of the Income-tax Act, 1961, without first obtaining consent of the BIFR as provided in section 22(1) of the Sick Indust ..... X X X X Extracts X X X X X X X X Extracts X X X X
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