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TMI Blog2021 (3) TMI 1075X X X X Extracts X X X X X X X X Extracts X X X X ..... to consider the request for waiver of interest on the interest free sales tax deferral amount availed by the appellant under the provisions of the Tamil Nadu General Sales Tax Act, 1959 (for short, the Act) as provided under Section 17-A(2) of the Act by considering their case afresh for waiver of interest. 4. The learned Single Judge was of the view that though the appellant breached the terms of agreement, considering the peculiar facts and circumstances of the appellant's case that it became a sick industrial company while it was coming out of the deferral period, at best, it might be entitled for further deferment of tax liability as per G.O.Ms.No.1076 (MIGI) dated 04.10.1988. It was further held that there was no legal basis for the appellant to claim a complete waiver from payment of interest as a matter of right based on the materials, which were presented for consideration. The learned Single Judge also issued a direction to form a Sub-Committee to decide the case of the appellant afresh in terms of the decision in the case of Amutha Mills Private Ltd. Vs. Assistant Commissioner (CT) [W.A.No.1482 of 2006 and W.P.No.41326 of 2006 dated 06.12.2006]. Being aggrieved by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Special Government Pleader is that cancellation of the agreement became automatic as soon as a default has occurred or a violation has occurred in the terms and conditions of the said agreement. 10. However, going by the language employed in Clause 1 of the said agreement, we find that a written order of cancellation is mandated because there was a condition stipulated that in case of default of any of the conditions, the deferral agreement should be canceled for the entire period, for which, the same has been granted. Furthermore, if there is a violation, it would be incumbent on the Department to indicate to the dealer as to the nature of violations and principles of natural justice also have to be read into the provision, which would require a show cause notice to be issued to the dealer. Hence, a written order of cancellation of the agreement is what is contemplated in Clause 11 of the terms and conditions of the deferral agreement. 11. As stated above, the deferral agreement entered into between the appellant and the Department was not canceled. 12. The following facts are very peculiar to the case on hand. We say so because in the following decisions, which were cited a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stered the appellant and held that it was no longer a sick industrial company under the provisions of the SICA and all the creditors/stake holders were free to recover their dues from the company as per law. If, according to the respondent - Department, the appellant was a defaulter, it was well open to the respondent - Department to initiate recovery proceedings. 16. The respondent - Department rightly understood the position and issued a notice in Form No.4 on 20.3.2013 pointing out that the appellant had availed the deferral amount of Rs. 74,63,827/- for the period from 01.6.1998 to 20.5.2003, that they ought to have started repayment of deferred tax from June 2003, that as the appellant violated the conditions with effect from 01.6.2003, they were in arrears of tax to the tune of Rs. 74,63,827/- under the Act and the Central Sales Tax Act, 1956. 17. Further, in the said notice, it has been specifically stated that the appellant unit was declared as a sick industrial company by the BIFR vide case No.358/2003 and that the IDBI Bank was appointed as the Operating Agency. Further, on 05.2.2003, the BIFR de-registered the appellant as it was no longer a sick industrial company and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght consequential directions. 21. In the counter affidavit filed by the Assessing Officer in the said writ petition, in paragraph 6, a tabulated statement has been given showing as to how the arrears were calculated and the interest was payable. The learned Single Judge issued directions in the writ petition for formation of a Sub-Committee and for reconsideration of the appellant's case while simultaneously holding that the appellant was liable to pay interest and that they had got no vested right to claim that interest had to be waived by the respondent - Department. 22. Be that as it may, we will proceed to consider the facts of the present case as to what remedy the appellant would be entitled in our hands. 23. As rightly noted by the Department, the net worth of the appellant had become positive on 05.2.2013. In terms of the direction issued by the BIFR, it was well open to the respondent - Department to recover the dues from the appellant on and after 05.2.2013. This position was rightly understood and a demand dated 20.3.2013 was issued. The demand did not quantify the interest payable. The request of the appellant for extension of time was also rejected vide proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 22 of the SICA, the respondent - Department was prohibited from proceeding with any recovery against the appellant and this is a statutory prohibition, which binds the respondent - Department. 30. From the representation given by the appellant to the Government dated 05.8.2014, we find that the Sales Tax Department did not appear before the Board on several dates when the case was heard. Be that as it may, the due date for repayment could have never occurred, in the facts and circumstances, between 01.8.2003 when the appellant was referred to the BIFR and 31.5.2006, the appellant was declared as a sick industrial company till its net worth turned positive and it was discharged from the Board on 05.2.2013. 31. Thus, on facts, we hold that the date, on which, the repayment became due for the appellant's case shall be fixed on 06.2.2013. Admittedly, the appellant cleared the entire sales tax on 25.4.2015. Hence, for the period from 06.2.2013 to 25.4.2015, the appellant is liable to pay interest. 32. The learned Senior Counsel appearing on behalf of the appellant has placed reliance on G.O.Ms.No.99 Industries (MIG-II) Department dated 04.4.1994. 33. This is a Government O ..... X X X X Extracts X X X X X X X X Extracts X X X X
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