BIFR reference does not suspend tax interest liability unless the dues are covered by a sanctioned rehabilitation scheme.

Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 applies only to liabilities covered by an inquiry, sanctioned rehabilitation scheme, or its implementation; a mere reference or registration before BIFR does not by itself suspend independent revenue dues. The Court noted that the interest liability had arisen before the registration date and there was no material showing inclusion in any sanctioned scheme or express waiver. On that basis, the statutory bar was not attracted, and the obligation to pay interest under the Chhattisgarh Vanijyik Kar Adhiniyam, 1994 remained enforceable against the assessee.

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Issues: Whether mere registration of the assessee's unit before the Board for Industrial and Financial Reconstruction protected it from levy and recovery of interest on delayed payment of tax under the statutory scheme.

Analysis: Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 was held to operate only where the relevant liability is covered by an inquiry, sanctioned scheme, or its implementation, and the protection extends to dues included in the scheme. The Court applied the settled principle that a mere reference or registration before the Board does not automatically suspend all revenue liabilities. Since the interest liability had arisen before the registration date and there was no material to show that the liability had been included in any sanctioned rehabilitation scheme or expressly waived, the statutory bar was not attracted. The liability to pay interest under Section 26(4)(a) of the Chhattisgarh Vanijyik Kar Adhiniyam, 1994 was treated as a statutory obligation not displaced by the general claim of sickness.

Conclusion: The assessee was not entitled to protection under Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 against levy of interest, and the levy and recovery were upheld.

Ratio Decidendi: Section 22(1) protects only those liabilities that are included in, or covered by, a sanctioned rehabilitation scheme for a sick industrial company, and a mere BIFR reference does not suspend independent statutory tax liabilities.

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