Transferee company cannot use BIFR scheme protection to block recovery of its own admitted tax liabilities.

Recovery of a transferee company's admitted tax liabilities under the Madhya Pradesh VAT Act was not stayed by a sanctioned BIFR scheme applicable to the transferor company. The Court held that the scheme's benefits and concessions were confined to the transferor, and the petitioner could not defer payment of its own dues by relying on that protection. It also noted that relief under the sick industrial regime was no longer available in view of the later legal position. The challenge to the demand notice and garnishee proceedings therefore failed, and the writ petition was dismissed.

---

---

Issues: Whether recovery notices and garnishee proceedings issued under the Madhya Pradesh Value Added Tax Act could be interfered with on the ground that the petitioner claimed protection under a sanctioned BIFR scheme and the Sick Industrial Companies Act.

Analysis: The recovery was held to relate to the petitioner's own admitted tax liabilities and not to liabilities of the transferor company covered by the BIFR scheme. The benefits and concessions under the sanctioned scheme were found to be confined to the transferor company, and the petitioner could not defer payment of its admitted dues by invoking that scheme. The Court also noted that proceedings under the sick industrial regime no longer afforded relief in view of the subsequent legal position, and therefore the challenge to the demand notice and garnishee order was not maintainable.

Conclusion: The challenge to the recovery action failed and the writ petition was dismissed.

Ratio Decidendi: A transferee company cannot avoid recovery of its own admitted tax liabilities by invoking benefits granted under a BIFR scheme to the transferor company, especially where the sick industrial protections no longer survive.

---