TaxTMI 
TaxTMI 
2013 (9) TMI 62
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....cluding the respondent-Excise Department. The said rehabilitation scheme was formulated under the provisions of the Act and in exercise of the power under section 18 of the Act and after hearing all the parties concerned, the said scheme was approved on November 12, 2002 (annexure 2 to the writ petition). The contention of the petitioner is that as per the terms and conditions of the approved scheme, the company was granted exemption from payment of interest and penalty and furthermore that excise duty finally payable for pending cases, relief in that regard would be given within a period of two years from the year in which the said amount became payable. 4. We have heard Sri V. K. Upadhayay, learned senior counsel assisted by SriRitvik Upadhayay appearing for the petitioner-company, and Sri S. P. Kesarwani, learned counsel for the respondent-Department. Sri Upadhayay also stated that reply to the second supplementary counter affidavit is not required. 5. It has been contended by learned counsel appearing for the petitioner that the company had stopped its manufacturing activities with effect from May 15, 1989. It was registered as a sick company in July, 1990 under the provision....
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....inally payable in pending cases over a period of 2 years from the year in which such amount becomes payable. However, by the Department's letter dated November 3, 2004, the company's request was declined. Therefore, the petitioner submitted representations on November 22, 2004 and January 17, 2005, but instead the respondent issued another notice dated January 18/25, 2005, to recover a sum of Rs. 13,78,000. In response, the petitioner again made a request through its letter dated January 31, 2005, wherein a request was made to the Commissioner of Central Excise, Kanpur Division requesting for permission to make payment of the differential duty of Rs. 13,78,000 without interest, in terms of the orders passed and rehabilitation scheme of the company as proposed by the BIFR on November 12, 2002. However, the petitioner-company made payment of a sum of Rs. 6,89,000 as part payment being 50 per cent. of the payment of the original demand as per their undertaking vide letter dated January 31, 2005 and for the remaining 50 per cent. it was submitted by the company that the same would be paid in the year 2005-06. The grievance of the petitioner is that in spite of its undertaking given in ....
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....ct. It may be noted that the Act was enacted in the public interest making special provisions for the timely detection of sick and potentially sick companies, speedy determination by a Board of experts of the preventive, ameliorative remedial and other measures as may be necessary, and expeditious enforcement of measures to be taken for rehabilitation of such sick companies/ industrial undertakings. 13. A reference may be made to the preamble of the Act which reads as follows : "An Act to make in the public interest, special provisions with a view to securing the timely detection of sick and potentially sick companies owning industrial undertakings, the speedy determination by a Board of experts of the preventive, ameliorative, remedial and other measures which need to be taken with respect to such companies and the expeditious enforcement of the measures so determined and for matters connected therewith or incidental thereto." 14. From a reading of the preamble, it will be clear that the Act was enacted as beneficial legislation specifically to assist the sick industrial undertakings/companies for their rehabilitation. 15. Section 4 of the Act provides for the establishment of....
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....ompany. (2) The Board may, if it deems necessary or expedient so to do for the expeditious disposal of an inquiry under sub-section (1), require by order any operating agency to enquire into and make a report with respect to such matter as may be specified in the order." 19. Section 17 of the Act provides : "17. Powers of Board to make suitable order on the completion of inquiry.-(1) If after making an inquiry under section 16, the Board is satisfied that a company has become a sick industrial company, the Board shall, after considering all the relevant facts and circumstances of the case, decide, as soon as may be by order in writing, whether it is practicable for the company to make its networth exceed the accumulated losses within a reasonable time." 20. Section 18 of the Act provides : "18. Preparation and sanction of schemes.-(1) Where an order is made under sub-section (3) of section 17 in relation to any sick industrial company, the operating agency specified in the order shall prepare, as expeditiously as possible and ordinarily within a period of ninety days from the date of such order, a scheme with respect to such company providing for any one or more of the followi....
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....er instrument having effect under the said Act or other law, no proceedings for the winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof and no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans, or advance granted to the industrial company shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the Appellate Authority. 23. Section 32 of the Act declares as follows : "32. Effect of the Act on other laws.-(1) The provisions of this Act and of any rules or schemes made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law except the provisions of the Foreign Exchange Regulation Act, 1973 (46 of 1973) and the Urban Land (Ceiling and Regulation) Act, 1976 (33 of 1976) for the time being in force or in the memorandum or articles of association of an industrial company or in any other instrument having effect by virtue of any law other than this Act." 24. From a read....
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.... force no proceeding for the winding up or execution or distress or the like against any of the properties of the industrial undertaking company and no proceedings for recovery of money or for enforcement of any security against the company, etc., shall be maintainable. 29. Section 32 of the Act further provides that the schemes made under the Act shall have effect notwithstanding anything inconsistent therewith contained in any other law except two Acts namely, the FERA and Urban Land Ceiling Act for the time being in force and the memorandum or articles of association of an industrial company or in any other instrument having effect by virtue of any other law other than this Act. The Excise Act has not been exempted from the applicability of section 32 of the Act. 30. The provisions of the Act came up for consideration before the apex court reported in Tata Davy Ltd. v. State of Orissa [1997] 14 SCL 81. This was a case in respect of recovery of arrears of sales tax under the Orissa Sales Tax Act, 1947 and the apex court interpreting the provisions of section 22 of the Act held as follows (page 5 of 93 Comp Cas) : "The Central Act is enacted under entry 52 of List I of the Seve....
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....litation of the sick industrial company is within the domain of the BIFR. Section 26 not only covers orders passed under the SICA but also any matter which BIFR is empowered to determine." 33. The provisions of section 32 and the overriding effect of the Act, 1985 was also considered by a Division Bench of the Bombay High Court in Vadilal Dairy International Ltd. v. State of Maharashtra [2009] 26 VST 530 (Bom.), and the Division Bench held as fallows (page 534 of 26 VST) : "Having so held we may also point out that it is the contention of the respondents that they were not heard. Considering the argument advanced the remedy for such person would be to apply before the BIFR for recalling that part of the sanctioned scheme in so far as they are concerned. It is now-settled law as laid down by the Supreme Court in Grindlays Bank Ltd. v. Central Government Industrial Tribunal Manu/SC/0308/1980 ; AIR 1981 SC 606, that the power of procedural review is inherent in a court and or quasi-judicial body which includes the power to set aside an ex parte order, i.e., an order passed without notice to the aggrieved person. If therefore, the respondents are still aggrieved by that part of the o....