AI Drafter 
TaxTMI 
TaxTMI 
2008 (11) TMI 622
X X X X Extracts X X X X
X X X X Extracts X X X X
....spondent No. 3-company was declared sick under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) vide order dated June 28, 1999, which was followed by Draft Rehabilitation Scheme dated April 11, 2001. The Scheme was circulated to all concerned including the petitioner. The petitioner by letter dated June 21, 2001, annexure P2 raised objections to grant of concessions. It was submitted that concessions/reliefs could be considered only if the same were consistent with the policy of the State subject to approval of the Steering Committee. The policy was annexed to the said objections. However, the BIFR vide impugned order dated July 5, 2001, annexure P3 sanctioned the Scheme under section 18(4) of the SICA. With regard to the concessions to be granted by the petitioner-State, following provision was incorporated:- "4.5. State Government/other agencies (i) To declare the company as a relief undertaking and grant all reliefs and concessions applicable to a sick industrial unit. (ii) To allow the company to utilize the Sales Tax Deferment Loan Scheme to its fullest without imposing any time-limit. (iii) To exempt HTL from applicabili....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t for the period of nine years as such demand/direction for unlimited period is not in conformity with the scheme. As such the State Government is a secured creditor for the interest-free loan granted in lieu of sales tax deferment. Therefore, the outstanding amount of Interest Free Loan (IFL) in lieu of sales tax deferment availed by the company is Rs. 14,02,92,647. Principal as on May 31, 2003 and Rs. 6,48,94,682 interest as on March 31, 2003 is recoverable. (d) that the changes made in the Central Sales Tax Act and rate notified under the VAT Act has resorted the position regarding applicability of rate of tax on the sale (intra-State as well as interState) as it existed before unbundling of Department of telecommunication. Therefore, request of the company may be rejected. In view of the above facts, M/s. Haryana Telecom Limited, Village and PO Kheri Sadh, District Rohtak was not found eligible for grant of reliefs/concessions as a sick unit by the Committee and therefore, it was decided by the Committee to reject their case and the honourable BIFR may be informed accordingly again with the request to withdraw the show-cause notice under section 33 of the SICA to Principa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....llant-company states that it has collected Rs. 834.71 lacs from May 7, 1993 up to March 31, 1996 and has repaid Rs. 38.60 lacs to the Government of Haryana with effect from April 1, 1996. The appellant states that it availed of sales tax exemption in terms of para 4.5(iii) of SS-01. As per the calculations of the appellant-company an amount of Rs. 796.11 lacs is payable to the State Government of Haryana which the company is willing to remit immediately." During the hearing, it has been pointed out that respondent No. 3 filed W.P. (C) No. 3925 of 2008 in Delhi High Court, which was dismissed on September 29, 2008 Haryana Telecom Limited v. State of Haryana [2009] 22 VST 219 (Delhi) [App], with the following observations: "The stay granted by this court on July 4, 2008 has been enjoyed by the appellant without complying with the pre-condition of deposit. We are satisfied that no ground for interference has been made out specially when the appellant was under a legal obligation to repay the amount of sales tax of Rs. 7.96 crores collected by it, to the Government of State of Haryana. Accordingly, the writ petition has no merits and stands dismissed." Main ground of challe....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was stipulated; the BIFR could not set aside sales tax demand under the sales tax law when the said amount had already been recovered by respondent No. 3 under the provisions of the State Act relating to sales tax and that the BIFR failed to consider objections put forward by the petitioner in letter dated June 21, 2001, annexure P2 and letter dated August 31, 2003, annexure P10. Appeal and application of the State were wrongly dismissed by AAIFR. Respondent No. 3 was not running the industry and failed to discharge its liability under the impugned Scheme on account of which the Delhi High Court dismissed its writ petition. We allow oral prayer of the petitioner-State to challenge annexure P14, the order of the AAIFR dismissing the appeal against the order dated July 5, 2001 passed by the BIFR and also the order dated December 5, 2006, annexure P15 dismissing the application for recall of order dated September 18, 2006, as allowing such a prayer does not, in any manner, prejudice respondent No. 3. Prayer is only a matter of procedure and in substance, even after allowing the said prayer, question remains mainly to consider validity of scheme dated July 5, 2001 against which spe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o frame a Scheme under section 18(4) by including measures specified in section 18(1) or other measures than directions for giving financial assistance, including winding up. The impugned Scheme, is thus, clearly ultra vires the powers of the BIFR under section 19(1) read with section 19(3). Not only the petitioner did not give its consent to the draft scheme, the petitioner put forward its objections vide letters dated June 21, 2001 and August 31, 2003, which have not been, in any manner, discussed by the BIFR, which cannot be upheld as proper judicial approach. No judicial or quasi-judicial authority or even administrative authority can act arbitrarily and pass an order affecting a party without considering the view-point of such a party. The order of the BIFR is, thus, clearly arbitrary by ignoring altogether objections of the petitioner-State. No doubt, section 32 of the SICA contains a non obstante clause, even the said provision cannot empower the BIFR to act arbitrarily or to go contrary to the statutory scheme. The operation of non obstante clause will be limited to making provision of the SICA operative in case of conflict. The Act itself contemplates an order stipulating ....