BIFR protection against recovery requires proof of pending proceedings or an operative scheme before restraint can apply.

Protection under section 22(1) of the Sick Industrial Companies (Special Provisions) Act could not be invoked to stop sales tax recovery unless the petitioner first produced proof of pending BIFR proceedings or an operative rehabilitation scheme before the assessing authority. The petitioner claimed sick-industrial-company status, but no supporting material was filed, and an earlier tribunal direction had also required such proof before any restraint on recovery could operate. On that basis, immediate quashing of the recovery notice was declined. To allow the claim to be substantiated, the notice was kept in abeyance for six weeks, with liberty for the respondents to proceed in accordance with law if no proof was produced.

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Issues: Whether the impugned sales tax recovery notice could be quashed on the ground that the petitioner claimed protection under section 22(1) of the Sick Industrial Companies (Special Provisions) Act, and whether the petitioner had first to establish the pendency of proceedings before the BIFR.

Analysis: The petitioner asserted that it was a sick industrial company and therefore entitled to statutory protection, but no proof was produced to show that proceedings were pending before the BIFR or that any scheme had been framed. The burden was on the petitioner to place such material before the assessing authority, and a similar earlier direction of the Special Tribunal had also required the petitioner to furnish proof of BIFR proceedings before any restraint on recovery could operate. In the absence of such proof, the recovery notice could not be quashed at that stage. However, in order to afford the petitioner an opportunity to substantiate its claim, the notice was directed to be kept in abeyance for six weeks.

Conclusion: The challenge to the recovery notice was not accepted for immediate quashing, but limited interim protection was granted by keeping the notice in abeyance to enable the petitioner to produce proof of pending or concluded BIFR proceedings.

Final Conclusion: The writ petition was disposed of with a conditional opportunity to the petitioner to establish its entitlement to statutory protection, and the respondents were permitted to proceed in accordance with law if such proof was not produced within the stipulated time.

Ratio Decidendi: A claimed protection under section 22(1) of the Sick Industrial Companies (Special Provisions) Act cannot be invoked against recovery proceedings unless the petitioner first produces proof of pending BIFR proceedings or an operative scheme before the assessing authority.

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