By C. B. Thakar, Advocate
G. G. Goyal, Janak Vaghani, Chartered Accountants
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Sick Industrial Unit-BIFR-Recovery Of Dues-As Per Assessment Order After Remand-Passed After Cut Off Date-For Period Prior to Cut Off Date-Is Current Outstanding Dues-Protected By Rehabilitation Scheme-Sick Industrial Companies (Special Protection) Act, 1985.
Facts
BIFR by order dated 12-03-2007, prepared rehabilitation scheme for the petitioner having cutoff date as of 30-06-2007. The UP Commercial Tax Department applied to BIFR to allow recovery of current dues. The BIFR passed order dated 26- 03-2008 permitting the Department to recover the current dues. The company filed writ petition before the Allahabad High Court against the said order passed by the BIFR.
Held
The words “outstanding dues” and “current dues” are to be understood in the context of rehabilitation scheme prepared by the BIFR, and the object and purpose of section 22 of the Sick Industrial Companies (Special Protection) Act, 1985. The objectof preparing rehabilitation scheme is to give a protective umbrella to the sick units for rehabilitation to provide for deferment or for a different treatment of the payment of current dues, prior to the cut-off date which may be termed as outstanding dues. The current dues for the purpose of rehabilitation scheme are those which fall due after the cut-off date. The liabilities created, taxes falling due, assessed and demand rise after the cut-off date, do not fall within the provision of section 22 of the SICA Act. Any demand in pursuance of the assessment order, prior to the cut-off date had to be classified as outstanding dues to be protected by the scheme. In the case of reassessment, after remand of a period prior to cut-off date, the dues do not partake the character of current dues and is protected by the rehabilitation scheme. Accordingly, the writ petition filed by the company was allowed.
