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2013 (9) TMI 62 - HC - Companies LawRehabilitation scheme - Demand raised by Excise Department - Whether the petitioner was liable for payment of interest and penalty as demanded by the notice – Held that:- The notice of demand was absolutely illegal and was quashed - The Central Act does not impair or interfere with the rights of the States to legislate with respect to sales tax under entry 54 of List II of the Seventh Schedule - the provisions of clause of the rehabilitation scheme contains an express waiver from payment of interest, penalty and to accept payment of excise duty finally payable in pending cases over a period of 2 years, from the year in which such amount becomes payable - In the larger interest of the industrial health of the nation, section 22 of the Central Act requires all creditors seeking to recover their dues from the sick industrial companies in respect of whom an inquiry under section 16 is pending or a scheme is under preparation or consideration or has been sanctioned, to obtain the consent of the said Board to such recovery - If such consent was not secured and the recovery was deferred, the creditors’ remedy was protected for the period of deferment was, by reason of sub-section (5) of section 22, excluded in the computation of the period of limitation - The words ‘any other law’ in section 22 cannot, therefore, be read in the manner suggested by learned counsel for the respondents - The apex court specifically referred to the provisions of clause 13(b)(3) of the scheme and in paragraph 23 of the judgment, it was again reiterated that there being no express wavier of interest, the statutory provision must prevail. Tata Davy Ltd. v. State of Orissa [1997 (8) TMI 78 - SUPREME COURT OF INDIA ] - The rehabilitation scheme framed by the BIFR, the petitioner was not liable for payment of interest and penalty - Section 22 of the Act clearly provides that once proceedings have been initiated under the Act and an inquiry under section 16 is pending or any scheme referred to under section 17 is under preparation or consideration or a sanctioned scheme is under implementation then, notwithstanding anything contained in any other law for the time being in force no proceeding for the winding up or execution or distress or the like against any of the properties of the industrial undertaking company and no proceedings for recovery of money or for enforcement of any security against the company, etc., shall be maintainable. The petitioner having already deposited part payment for 2004-05 and having given an undertaking for payment of remaining 50 per cent amount which also was paid - the liability towards payment of excise duty had been duly discharged as per the demand notice and the company was not liable for payment of penalty or interest in terms of the specific provisions of the Rehabilitation Scheme – Petition allowed.
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