BIFR protection bars coercive recovery of pre-cut-off sales tax dues unless the rehabilitation scheme permits it.

Section 22 of SICA barred coercive recovery of sales tax dues for the period before the BIFR cut-off date of 30 June 2001. The court held that recovery for the pre-cut-off period could proceed only in accordance with the BIFR-approved revival and rehabilitation scheme or with the BIFR's prior approval. The direction relating to statutory forms was treated as consequential to that restraint on recovery. Relief was therefore confined to protection against coercive recovery for the relevant pre-cut-off dues, while recovery for later dues remained subject to law and the BIFR framework.

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Issues: Whether coercive recovery of sales tax dues could be made for the period prior to the cut-off date fixed in the BIFR proceedings, and whether consequential directions could be issued regarding recovery and statutory forms.

Analysis: The petition was examined in the context of section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 and the proceedings before the BIFR. The cut-off date for crystallisation of the company's dues had been fixed as 30 June 2001. In these circumstances, coercive recovery of sales tax dues for the period up to that date was held to be impermissible except in accordance with the revival and rehabilitation scheme framed by the BIFR or with its prior approval. The direction to issue forms was treated as a consequential step flowing from the restraint on recovery.

Conclusion: Coercive recovery of the petitioner's sales tax dues for the period prior to 30 June 2001 was restrained, subject to the BIFR scheme and prior approval of the BIFR, and the consequential relief regarding statutory forms was granted.

Final Conclusion: The petition was partially allowed by protecting the petitioner against coercive recovery for the relevant pre-cut-off period while leaving the respondents free to proceed in accordance with the BIFR framework and the law for subsequent dues.

Ratio Decidendi: Where a company is before the BIFR and a cut-off date for crystallisation of dues has been fixed, coercive recovery of pre-cut-off tax dues is barred by section 22 of SICA unless it is undertaken in accordance with the approved rehabilitation scheme or with prior approval of the BIFR.

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