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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 ..... 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. The benefit of G.O.Ms.No.1076 Industries (MIGI) dated 04.10.1988 cannot be straightaway made applicable to the appellant because it is a discretion vested with the Government and several factors are to be considered before discretion is exercised - Hence, for the present, we do not intend to make any observation with regard to the applicability of G.O.Ms.No.1076 Industries (MIGI) dated 04.10.1988 to the appellant's case. But, it is left open to the appellant to approach the Government, if so advised. The appeal is allowed in part. - Writ Appeal No.252 of 2021 & CMP.No.1058 of 2021 - - - Dated:- 5-3-2021 - Honourable Mr. Justice T.S.Sivagnanam And Honourable Ms.Justice R.N.Manjula For the Appellant : Mrs.G.Thilagavathy, SC for Mr.R.Gopinathan For the Respondents : Mr.Mohammed Shaffiq, SGP assisted by Mrs.G.Dhanamadhri, GA JUDGMENT T.S.SIVAGNANAM, J. We have elaborately heard Mrs.G.Thilagavathy, learned Senior Counsel appearing on behalf of Mr.R.Gopinath, learned counsel on record for the appellant an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lace of business in Tiruvallur District. The appellant entered into a deed of agreement for deemed payment of deferred sales tax deemed to be loaning and recovery of loan, dated 08.9.2000. In terms of the said agreement, the sales tax due on the sale of products manufactured by the appellant in their premises should be deemed to have been paid to the Assessing Officer and an identical amount should be treated as Government loan. The said agreement contained as many as 12 conditions. 7. In terms of Clause 4 of the said agreement, in case of default in payment of the Government loan, the appellant had undertaken to repay the same together with interest. Clause 11 of the said agreement stated that in case of default of any of the conditions mentioned in condition Nos.3,4,5,6,7,8 and 9, the deferral agreement should be canceled for the entire period, for which, the same was granted. Clause 12 of the said agreement stated that in default of repayment of Government loan or cancellation of the deferral facility for violation of any of the conditions as mentioned in paragraphs 3 to 10, such Government loan, tax and interest due thereon should be recoverable in such manner as specifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich was considered, was as to what was the date of repayment in those cases. 13. The learned Senior Counsel appearing on behalf of the appellant has relied upon the decision of the Hon'ble Supreme Court in the case of Southern Agrifurane Industries Ltd. Vs. Commercial Tax Officer [reported in 2005 (2) SCC 575] wherein we find that the case was factually different because moratorium was granted to the dealer therein pursuant to the claim of rehabilitation framed by the Board for Industrial and Financial Reconstruction [for short, the BIFR] and the dealer defaulted in payment of tax in terms of the moratorium agreement, which gave a cause of action to issue a notice and for the consequential demand of tax and penalty. 14. In the instant case, the appellant became a sick industrial company and they filed a reference before the BIFR under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1958 (for short, the SICA) and it was received by the BIFR on 01.8.2003. By order dated 31.5.2006, the appellant was declared as a sick industrial company under Section 3(1)(o) of the SICA and the BIFR appointed the IDBI Bank as the Operating Agency under Section 17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ire dues of sales tax deferral availed within 30 days, as it was included in their revival package. The appellant further stated that they were not in a position to make any payment when it was under referral with the BIFR and no interest or penalty was to be charged for the period, as they were not allowed to make payment as per the BIFR guidelines. The appellant also pointed out that the Sales Tax Department did not appear before the BIFR and that there was no representation on behalf of them in the various hearings held by the BIFR when the matter was pending before the BIFR. Ultimately, the appellant prayed that necessary instructions might be given to the Assessing Officer not to proceed with the attachment. 19. The Principal Secretary to Government, Commercial Taxes and Registration (F1) Department, Government of Tamil Nadu, by letter dated 03.11.2014, informed the appellant that the request had been examined by the Government in detail and it has been noted that the appellant's net worth had become positive as on 31.3.2012 and based on this order, a notice had been served on the appellant, that recovery of the sales tax dues had to be done in accordance with law and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to whether the appellant would be liable to payment of interest from the date of deferral agreement or from the date, on which, the repayment was due. 26. So far as the first question is concerned, the same is no longer res integra and it has been held in the decision of the Hon'ble First Bench of this Court in the case of Amutha Mills Private Ltd., that interest would be payable from the due date for repayment of the loan and not from the date, on which, the IFST deferral loan was availed. 27. Hence, the question would be, in the facts and circumstances of the present case, what is the date, on which, the repayment is due. As we have mentioned earlier, the case on hand is very peculiar and appears to have not arisen in any of the earlier litigations and therefore, it requires to be dealt with in a different manner and obviously on such a reasoning, any observation or direction, which we may issue in this judgment, cannot be treated as a precedent. 28. As mentioned above, the appellant was de-registered by the BIFR on 05.2.2013. The first demand notice was issued on 20.3.2013. However, the appellant paid the dues only on 25.4.2015. The question would be, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the BIFR declared the unit as sick, whichever is later. 34. The endeavour of the learned Senior Counsel appearing on behalf of the appellant is to take umbrage under the said Government Order namely G.O.Ms.No.1076 Industries (MIGI) dated 04.10.1988 and she has stated that if G.O.Ms.No.1076 Industries (MIGI) dated 04.10.1988 is made applicable to the appellant, then they would be entitled for deferral till 04.2.2016 and that the payment of sales tax dues having been made on 24.5.2015, i.e well before 04.2.2016, the appellant may not be liable for interest. 35. However, the benefit of G.O.Ms.No.1076 Industries (MIGI) dated 04.10.1988 cannot be straightaway made applicable to the appellant because it is a discretion vested with the Government and several factors are to be considered before discretion is exercised. Hence, for the present, we do not intend to make any observation with regard to the applicability of G.O.Ms.No.1076 Industries (MIGI) dated 04.10.1988 to the appellant's case. But, it is left open to the appellant to approach the Government, if so advised. 36. For the foregoing reasons, the writ appeal is partly allowed, the order and direction issued in the w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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