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Judgment
The petitioner is a Company who has submitted a scheme under the Sick Industrial Company (Special Provisions) Act, 1985 for an order u/s 22 of the Act. Pending the approval of the scheme, the petitioner is running the unit and collecting Sales Tax but he wants to retain the tax collected without remitting to the State.
The Commercial Tax Officer in his notice dated 23.11.99 had intimated the petitioner that he is not eligible for the sanction of the revival scheme for the liabilities accrued subsequent to filing of application before B.I.F.R., New Delhi.
The learned counsel for the petitioner made a strong reliance on the judgment of the Supreme Court in Tata Davy Ltd. Vs. State of Orissa and Others, wherein their Lordships held that the State of Orissa cannot recover the arrears of Sales Tax from the appellant Company without first seeking to consent of the said Board in that behalf. That was a case where the appellant was declared sick in the year 1988. However, for the arrear accrued prior to that for the years 1983- 84 and 1984-85, recovery proceedings were initiated and in that case, their Lordships observed that without the consent, the arrears cannot be claimed by the appellant.
The question raised by the appellants was squarely answered by Their Lordships in Deputy Commercial Tax Officer and Ors. v. Corromandal Pharaceuticals and Ors., 1997 (105) STC 327 wherein Their Lordships held as follows:
"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 be covered within Section 22 of the Act. Any other construction will be unreasonable and unfair and will lead to a state of affairs enabling the sick industrial unit to collect amounts due to the Revenue and withhold it definitely and unreasonably. Such a construction which is unfair, unreasonable and against spirit of the statute in a business sense should be avoided."
Therefore, there is no scope for the petitioner to contend that he shall be able to run the sick unit, collect tax and retain it with him as per the scheme submitted by the petitioner before the B.I.F.R., New Delhi. No order by the B.I.F.R shall enable the petitioner only to make the payments as per that scheme pending for formulation of the scheme.
In the light of the clear pronouncements on the scheme, there is no scope for the petitioner to challenge the order of the Commercial Tax Officer. Hence, the writ petition fails and the same is dismissed. No costs. Consequently, writ Miscellaneous Petition No. 3095 of 2000 is also dismissed.