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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether, after sanction of a rehabilitation scheme under the Sick Industrial Companies (Special Provisions) Act, 1985, the sales tax appellate authority could ignore the scheme and sustain interest and penalty contrary to it.
Analysis: Section 32(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 gives overriding effect to the Act and to any sanctioned scheme over anything inconsistent contained in any other law. Once the rehabilitation scheme was sanctioned, the authorities under the sales tax law were bound to give effect to it. The appellate authority could not continue to fasten liability for interest and penalty in a manner inconsistent with the sanctioned scheme. Any grievance that the department was not heard in the BIFR proceedings did not justify ignoring the scheme at the appellate stage; the proper course, if still available, was to seek appropriate relief before the BIFR.
Conclusion: The answer was in the negative against the Revenue and in favour of the assessee. The authority acted without jurisdiction in refusing to give full effect to the sanctioned scheme so far as interest and penalty were concerned.
Ratio Decidendi: A sanctioned rehabilitation scheme under Section 32(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 prevails over inconsistent provisions of other laws and must be given effect by statutory authorities, including quasi-judicial authorities.
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