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2005 (5) TMI 630

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.... Section 3 of the Entry Tax Act provides for the levy and collection of tax on entry of goods specified in the First Schedule into a local area for consumption, use or sale therein at such rates not exceeding five per cent of the value of the goods. This tax is payable by every registered dealer or a dealer liable to get himself registered under the Entry Tax Act who brings or causes to be brought into a local area the goods whether on his own account or on account of his principal or any other person. No such tax is, however, levied or collected from a dealer who brings or causes to be brought into a local area any goods in respect of which tax has been paid or has become payable in any other local area. This exemption is not granted to a dealer unless he furnishes to the assessing authority a declaration in the prescribed form obtained from the prescribed authority and duly filled and signed by the dealer who is liable to pay tax on such goods under the Entry Tax Act. Rule 9-E of the Karnataka Tax on Entry of Goods into Local Areas for Consumption, Use or Sale Therein Rules, 1979 provides that the declaration to claim exemption under section 3 shall be in form No. 40. It further....

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.... charged and collected separately and which also carry a self-printed declaration in form 40; only in other cases production of declaration in form 40 shall be insisted in support of the claims of exemption. 4.. . . . " It is the common case of the parties that the appellant is liable to pay entry tax on cement with effect from April 1, 2002 and it has filed the appropriate declarations as required under the provisions of the Entry Tax Act and the Rules made thereunder. The tax that has become payable has not been paid due to financial difficulties. It appears that the appellant is selling cement to other parties who are dealers and proposes to issue declarations in form No. 40 to them. It approached the Deputy Commissioner of Commercial Taxes (Assessment) the fourth respondent herein for issuance of books containing form No. 40 to enable it to issue the same to the respective dealers. It is asserted in the writ petition that the representations made by the appellant in this regard evoked no response from the fourth respondent and on the other hand this respondent directed the appellant to first clear the dues towards entry tax before the book containing declaration form No.....

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.... 16 is pending or any scheme referred to under section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under section 25 relating to an industrial company is pending, then, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), or any other law or the memorandum and articles of association of the industrial company or any other instrument having effect under the said Act or other law, no proceedings for the winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof and no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans, or advance granted to the industrial company shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the appellate authority." Sickness in industrial companies results in loss of production, loss of employment, loss of revenue to the Central and State Governments and locking up of investible funds of banks and financi....

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....to initiate any proceedings either for the winding up of that company or for execution, distress or the like against any of the properties of the company to recover its dues except with the permission of the Board. As already observed, the purpose is to preserve the properties of the company so long as proceedings of the kind referred to in section 22(1) are pending. This provision, in our opinion, does not make it obligatory for the creditors including the Government to take all or any steps to enable the sick industrial company to carry on its business in a more meaningful manner. In the case before us, the fourth respondent has not initiated any proceedings against the appellant to recover the entry tax dues, he has only refused to issue the statutory declarations in form No. 40 which, if issued, would enable the appellant to give them to the dealers to whom cement is sold so that they could in turn claim exemption under section 3 of the Entry Tax Act. The effect of nonissue of the statutory forms would be that the appellant will not be able to furnish those forms to the dealers who purchase cement from it and those dealers shall not be entitled to claim exemption under sectio....