Home Case Index All Cases Companies Law Companies Law + HC Companies Law - 2017 (12) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (12) TMI 455 - HC - Companies LawRehabilitation by giving financial assistance - whether the sanctioned scheme in this case was binding on the States of Gujarat and Maharashtra as far as UCIL’s claim for refund of VAT/Sales Tax and electricity duty in terms of clauses 12.1 and 12.2 - Held that:- As is evident from Section 19(4) of SICA, it is in the absence of consent by any person, the Board may adopt such other measures including the winding up of the sick industrial company as it may deem fit. Likewise, the Maharashtra State had no notice of the scheme and became aware of it later. In its case too, its consent cannot reasonably be deemed. Therefore, BIFR could not have overridden or completely ignored the requirement of consent required under Section 19(2) of SICA. The argument that since there is a provision for filing an appeal against the order of BIFR (under Section 25 of SICA), the BIFR can ignore the mandate of Section 19(2) of SICA and sanction a scheme in the absence of consent without intimation to any state, or contrary to its object is an untenable proposition. To admit of this eventuality is to countenance any order of BIFR contrary to the law as it can be challenged in an appeal. There is nothing to indicate to why the BIFR thought it fit to reject the State of Gujarat’s objections, to the proposed scheme. In the circumstances mentioned above, this Court is of the opinion that the sanctioned scheme was not binding on both the States for want of consent on part of the State authorities rendering financial assistance. In the present case, the previous discussion clearly reveals that SICA was not followed, in that one State had objected to the scheme; the other was not even aware of it. Therefore, there was no consent, but opposition in one case and lack of knowledge: both contingencies could not have attracted the provision for “deemed consent”. In such event the scheme, being violative of SICA, could not have prevailed, by virtue of Section 32. This Court is further of the opinion that the petitioner’s grievance was to be redressed by it, within reasonable time of the denial of exemption, i.e. within one or two years of the sanction for the BIFR scheme. By not seeking recourse, firstly by pursuing with the State authorities for notifications or directions, to grant the needed exemption, on the one hand, and proceeding to recover VAT and other levies on the other, after the duration of the scheme, the petitioner has approached the Court after an inordinate delay. The idea of granting exemption was to incentivize growth and ensure commercial viability. The petitioner effectively gave up that relief by its inaction (in not seeking exemption or approaching BIFR or the courts in a timely manner) and by collecting taxes and depositing them.
|