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2007 DIGILAW 1276 (MAD)

SIVANANDA STEELS LTD. v. COMMERCIAL TAX OFFICER, AMBATTUR ASSESSMENT CIRCLE, CHENNAI.

2007-04-10

K.RAVIRAJA PANDIAN

body2007
ORDER K. Raviraja Pandian J. - This writ petition is filed seeking for the issuance of writ of certiorari to call for the records in respect of the impugned order dated December 10, 2001 in connection with CST No. 46449 of 2001-02 passed by the respondent and quash the same. The petitioner is a company manufacturing steel casting foundry and a registered dealer under the respondent. According to the petitioner due to globalisation, the petitioner - company was not able to compete with the multinational companies. Further there was restraint in respect of the steel casting market. Hence, the petitioner sustained heavy loss and the liability exceeded the assets of the company. Hence, the company was forced to move the BIFR for rehabilitation. BIFR after reviewing the company, ultimately framed a scheme by its proceedings dated September 28, 2000. While the petitioner was before the BIFR, the respondent has issued a show-cause notice on December 10, 2001 by intimating the petitioner that as per the order of the BIFR in case No. 107 of 2000 dated September 28, 2000 there was no specific reference regarding suspension of payment of sales tax arrears and as per the orders, the sales tax dues do not fall under the loans and advances of the debtors which were also not specifically included in the packages. By that notice, the petitioner was asked to show cause as to why the sales tax due from the petitioner should not be recovered along with interest as per section 24(3) of the Tamil Nadu General Sales Tax Act, 1959 by giving seven days' time to make its reply. The petitioner challenges the said show-cause notice by filing this writ petition. The learned counsel for the petitioner contended that in the scheme framed by the BIFR for revival it provides for waiver of penal charges and other interest outstanding as on the cut-off date under the head - Commercial Taxes Department. Hence, the amount demanded by the respondent is covered under the scheme. Till the petitioner revives the original position, the amount cannot be recovered unless or otherwise a specific positive order is obtained from the BIFR. He further contended that the entire sales tax amount has been paid and the penal interest has been covered under the scheme. In addition to that the petitioner has also moved the Samadhan Scheme and the same is pending before the authorities. He further contended that the entire sales tax amount has been paid and the penal interest has been covered under the scheme. In addition to that the petitioner has also moved the Samadhan Scheme and the same is pending before the authorities. Even in order to maintain the samadhan petition, the petitioner paid a sum of Rs. 2 lakhs. Hence, the show-cause notice has to be set aside. Heard the learned counsel on either side and perused the materials available on record. Admittedly, the scheme covers within it the penalty and interest payable on the belated payment of tax by the petitioner. In respect of tax there is no coverage under the scheme, obviously so, because tax is not paid by the petitioner from his pocket, but tax is being collected from the parties concerned made over to the Government. On the other hand, penalty and interest have to be paid by the petitioner from his own pocket. That might be the reason for the BIFR to include within itself the component of penalty and interest payable on the belated payment of tax. Leaving that, tax amount shall be paid by the petitioner. Admittedly, the tax has been paid. In respect of other disputed amount, the application under the Samadhan Scheme is pending. In order to maintain that application under the Samadhan Scheme the petitioner has also paid Rs. 2 lakhs. In this factual scenario, I am of the view that there is nothing for this court to adjudicate on the show-cause notice. The petitioner can very well put forth before the respondent by way of reply to the show-cause notice, all the subsequent developments, i.e., inclusion of penalty and interest in the scheme; payment of tax made by the petitioner; pendency of proceedings before the samadhan authorities; and obtaining of favourable orders before the respondents themselves. The writ petition is disposed of by permitting the petitioner to file its objections as stated above. Two weeks' time is granted from the date of receipt of a copy of this order to file its objections to the show-cause notice. Thereupon, the respondent is directed to proceed further in accordance with law. No costs.