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TMI Blog2012 (4) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... l, arbitrary and contrary to the provisions of section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). A consequential direction to set aside the impugned order is also sought. The petitioner's case appears to be long. Its attempts to move various legal fora and courts seem to be unending. All this, without any doubt, appears to prevent the bankers, financial institutions and the Government from recovering contractual/statutory dues payable by the petitioner towards liabilities. We will, for the purpose of this order, make this long story short to complete the formality of summation of pleadings. The petitioner availed of millions of rupees in loans from ICICI bank and IDBI in 1990 hypothecating movable asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding before them shall stand abated in terms of the third proviso to section 15(1) of the SICA. The petitioner assailed this order in W.P. No. 5471 of 2010. By order dated March 10, 2010 made in W.P. M. P. No.7032 of 2010 this court suspended the order. The petitioner statedly sent half-a-dozen letters contending that petitioner's registration as sick unit stands restored in view of the interim order of this court. Be that as it is, the first respondent issued the impugned notice of attachment informing that as the petitioner has not paid and did not show sufficient cause for non-payment of Rs. 3,41,23,585 being the arrears of sales tax under the Andhra Pradesh General Sales Tax Act, 1957 (the APGST Act), Central Sales Tax Act, 1956 (t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... VAT claimed in the notice of attachment do not form part of any scheme under implementation and therefore the writ petition is misconceived. Lastly he would submit that under section 16C of the APGST Act, tax due to the Government shall have the first charge on the property of the dealer and the said provision overrides other laws in force. He placed reliance on Corromandal Pharmaceuticals [1997] 105 STC 327 (SC); [1997] 89 Comp Cas 1 (SC); [1997] 10 SCC 649; AIR 1997 SC 2027, Central Bank of India v. State of Kerala [2009] 21 VST 505 (SC); [2010] 153 Comp Cas 497 (SC); [2009] 4 SCC 94 and Andhra Pradesh State Financial Corporation v. Government of Andhra Pradesh [2010] 34 VST 258 (AP); [2010] 51 APSTJ 117 (AP). The only question seriousl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over the dues of banks, financial institutions and secured creditors is valid and that RDB Act and SARFAESI Act do not create first charge in favour of banks. In Andhra Pradesh State Financial Corporation [2010] 34 VST 258 (AP); [2010] 51 APSTJ 117 (AP) this court considered vires of section 16C of the APGST Act. Following Central Bank of India [2009] 21 VST 505 (SC); [2010] 153 Comp Cas 497 (SC); [2009] 4 SCC 94, it was held that section 16C is "legislatively competent and impeccable". In some of the writ petitions decided by the Division Bench the action of the Department of Commercial Taxes in resorting to RR Act was also the subject-matter. The action was approved upholding the notice of attachment issued under the RR Act. Therefore t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders of this court in W.P. M. P., without there being formal proceedings by the BIFR to restore the reference. Indeed in paragraph 20 of the affidavit accompanying the writ petition the petitioner admits that the BIFR does not have the power of review and, therefore, unless and until BIFR restores the reference, in obedience to the orders of this court, the petitioner unilaterally cannot contend that the proceedings under the SICA are pending. Secondly section 22 of the SICA does not in any way bar the proceedings for recovery of sales tax arrears. This is well settled. In Corromandal Pharmaceuticals [1997] 105 STC 327 (SC); [1997] 89 Comp Cas 1 (SC); [1997] 10 SCC 649; AIR 1997 SC 2027, the Supreme Court held thus (page 333 in 105 STC): ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olute and can not be diluted or whittled down. All that is required by section 22(1) of the Act is that in cases where an inquiry is pending or scheme is under preparation or consideration or a sanctioned scheme is under implementation or an appeal is pending, no proceedings, as stated in section 22 of the Act for execution, distress or the like, shall be proceeded with except with the consent of the Board or as the appellate authority. What is contemplated by section 22(1) of the Act is only a previous consent of the Board for the proceedings to be initiated against a sick company. It is not an absolute bar. The counsel vehemently contends that the view in Corromandal Pharmaceuticals [1997] 105 STC 327 (SC); [1997] 89 Comp Cas 1 (SC); [19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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