Section 22 protection does not compel issuance of tax declaration forms where refusal is not coercive recovery action.

Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 protects a sick industrial company from coercive recovery proceedings such as winding up, execution, distress and similar steps against its assets during inquiry or rehabilitation. It does not require the State or a creditor to take affirmative action that merely facilitates the company's business. On that basis, refusal by the commercial tax authority to issue declaration Form No. 40 for non-payment of entry tax arrears was not treated as recovery action or execution against property, but as a denial of a facility linked to clearing arrears. The refusal was therefore not barred by section 22(1), and no mandamus would lie to compel issuance of the form.

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Issues: Whether refusal by the commercial tax authority to issue declaration Form No. 40 to a sick industrial company, on account of non-payment of entry tax arrears, was barred by section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 and entitled the company to a mandamus for issuance of the form.

Analysis: Section 22(1) of the 1985 Act protects a sick industrial company against proceedings for winding up, execution, distress or the like against its properties and against recovery steps that would amount to a positive coercive action by a creditor. The provision is directed to preserving the company's assets during pendency of inquiry or rehabilitation and does not compel a creditor, including the State, to take affirmative steps that may facilitate the company's business. Refusal to issue Form No. 40 did not amount to initiation of proceedings for recovery of tax dues or execution against property; it was, at most, pressure to clear arrears and a denial of a facility that would help the company retain customers.

Conclusion: The refusal to issue Form No. 40 was not hit by section 22(1) of the 1985 Act and no mandamus could be issued to compel its supply.

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