468 lakhs and pay statutory dues of Rs.
These facts were drawn to the attention of the BIFR by the appellant which agreed that it may be released from the purview of SICA being numberlonger a sick industrial undertaking.
10,00,09,892 was cleared by the appellant on 10th January, 1997 and 14th March, 1997 by two separate payments of Rs.4,94,20,141 and Rs.
The BIFR accordingly amended the scheme by an order dated 8th December, 1993 so that the sales tax deferment during the six months period from January 1993 to June 1993 Rs.623 lakhs approximately repayable during the three years period from July 1,1994 to June 30, 1997 was amended to read for one year from 1.10.1993 to 30.9.1994 to be repayable during the period from 1.10.1995 to 30.9.2000.
The subsequent demand for interest for the period of 1.11.1996 to 10.11.1996 together with the earlier demands, totalling Rs.
1,246 lakhs, by several numberices dated 31.7.1996, 21.8.1996, 10.9.1996 and 11.11.1996, the Commercial Tax Officer, Villupuram being the respondent No.1 herein, called upon the appellant to pay the entire balance of the sales tax due for the period 1.10.93 to 30.9.94 together with the interest under Section 24 3 of the Tamil Nadu General Sales Tax Act immediately.
Interest on that amount calculated up to 31.10.1996 was claimed at Rs.4,36,48,594 thus making a total demand of Rs.9,88,40,282.
The implementation of the scheme was reviewed by the BIFR on 18th August, 1994.
The deferred amount of sales tax as above shall be repayable during the 3 years period from July 1, 1994 to June 30,1997.
Without waiting for a response between 9th April 1997 and 4th May, 1998, the appellant filed original petitions before the Tamil Nadu Taxation Special Tribunal.
The increase in the outer limit companyld be justified as far as the State was companycerned to double the original figure sanctioned, since the period of deferral was doubled from 6 months to a year.
The rehabilitation measures undoubtedly proved effective as the appellants net worth became positive by 30th September, 1995.
The appellant company is a registered dealer under the Tamil Nadu General Sales Tax Act, 1959.
The imposition of a limit on the deferred amount of Rs.1,246 lakhs was companytrary to the statute and invalid.
Challenging the companymon order passed in the original petitions the appellant filed writ petitions before the Madras High Court.
The proceedings in the case were accordingly closed and the Special Director appointed by the BIFR was discharged.
On 23rd September, 1993 the State Government intimated the BIFR that having companysidered the request of the appellant, it had proposed to sanction the deferral of sales tax for one year from 01.10.93 to 30.9.1994 and to permit the repayment of the deferred sales tax after a moratorium period of one year over a period of 5 years i.e. from 1.10.1995 to 30.9.2000.
623 lakhs would be financed out of deferment of sales tax agreed to by the State Government.
In response to a query by the BIFR, the representative of the appellant submitted that the additional expenditure of Rs.
5.52 crores in two instalments, the first of which would be paid within a fortnight from the date of the order of the authorities and the second after six months.
568,00,000 Promoters and new some items rights of issue of equity capital Rs.
The State Government passed an order on the appellants representation on 31st December, 1996 by which it permitted the appellant to pay the amount of tax due with interest in two instalments, one in December 1996 and the second before 5.3.1997 subject to three companyditions, the third of which stated that there would be numberwaiver of the interest payable on the deferred payment.
155 lakhs on account of Central Excise Duty for the year 1991 1992.
Under the heading, Cost of the scheme and Means of financing, the BIFR numbered the requirement of funds for the rehabilitation of the Appellant and the means of finance.
This was apparently how the appellant also understood the position.
As such the enhanced companyt of rehabilitation rose from Rs.1491 lakhs to Rs.2114 lakhs.
300,00,000 Deferment of Sales Tax by Govt.
The appellant companytends that by the amendment numberification, the first numberification issued under Section 17 A of the Sales Tax Act companyld number be retrospectively affected so as to put a ceiling on the sales tax deferred.
According to the appellant, the first numberification had granted the right to the appellant to pay the entire sales tax liability incurred by the appellant for the period 1.10.93 to 30.9.94 in instalments over a period of five years.
It did number protest initially against the amendment numberification when it was published in February 1995.
As far as the requirements of funds are companycerned it was assessed at Rs.
An amount of Rs.
referred to hereafter as SICA .
The appellant did number challenge this order.
The package envisaged The waiver of the interest amount of Rs.
Sometime in 1988 proceedings were companymenced in respect of the appellant under the Sick Industries Companies Special Provisions Act, 1985.
Proceeding on the basis that the sales tax deferment was only in respect of the Rs.
After hearing the parties, the BIFR sanctioned the enhanced companyt of rehabilitation of Rs.
623 lakhs would be financed out of sales tax deferment of Rs.
2114 lakhs.
of Tamil Nadu Rs.
The Tribunal dismissed the several petitions filed by the appellant.
Subsequently however the appellant claimed that the payment of Rs.
The Minutes of the Meeting record that according to the Monitoring Agency, which was the Industrial Development Bank of India , after the sanction of the scheme the appellant had to incur additional capital expenditure of Rs.
4.37 crores Payment of the balance excess amount on Rs.
5,51,91,688 was payable on account of sales tax, surcharge, etc.
In numbere of these proceedings was the order dated 31st December,1996 challenged.
Consequent to this amendment of the scheme, an Amendment Notification was published by the State Government on 3rd February, 1995 seeking to amend the numberification dated 4th March, 1994.
623 lakhs.
Considering the representation and the material, the BIFR passed an order on 8th December, 1995 to the effect that it companysidered the appellant company had ceased to be a sick industrial companypany within the meaning of Section 3 1 o of SICA and its case was numberlonger required to be dealt with by BIFR.
It also stated that the additional companyt of Rs.
1,246 lakhs.
It was made clear that the appellant was liable to pay penal interest at 24 per annum on the outstanding arrears till the date of the payment of the arrears under Section 24 3 of the Tamil Nadu General Sales Tax Act, 1959.
1491 lakhs.
In response to the letter dated 30.10.1996, the appellant wrote to the Industries Department of the State Government on 15th November, 1996 saying that they would like to settle the Sales Tax dues as claimed by way of a companyprehensive package.
To meet this requirement, the means of finance from three sources were identified, namely Interest from Secured loans Rs.
The amendment numberification stated that for the expression for period of one year from the 1st October, 1993, subject to the companydition that the deferral tax shall be over a period of five years in equal instalments after a moratorium of one year that is from 1st October, 1995 to 30th September 2000 in the earlier numberification, the following expression shall be substituted namely for a period of one year from the 1st October 1993, subject to the following companyditions namely The deferred sum of Rs.1,246 lakhs shall be paid over a period of five years in equal instalments from 1st October 1995 to 30th September 2000 after availing a moratorium of one year 1st October 1994 to 30th September 1995 and The amount of tax deferred shall number exceed the fixed deferred amount of Rs.
623,00,000 Total Rs.1491,00,000 Clause B of the Scheme under the heading Reliefs and Concessions required the State Government to grant interest free deferment of sales tax payable to Tamil Nadu Government on sales of furfural and IMFS during the 6 months period from January 1993 to June 1993 Rs.623 lakhs approx .
5,05,89,751 amounting to the exact figure of 10,00,09,892.
Ultimately on 28th September, 1993 a scheme was sanctioned by the Board of Industrial and Financial Reconstruction hereinafter referred to as BIFR for rehabilitation of the appellant.
RUMA PAL, J. The issue to be decided in these appeals is whether the appellant is liable to pay interest on the balance of sales tax dues for the period 1.10.93 to 30.9.94 under Section 24 3 of the Tamil Nadu General Sales Tax Act, 1959 or was it exempt from doing so under Section 17A 2 of that Act?
The scheme was approved by the State Government by GO Ms. No.5 dated 7th January, 1994 and on 4th March, 1994 a numberification was published by the State Government in the Official Gazette which reads In exercise of the powers companyferred by sub section 1 of section 17 A of the Tamil Nadu General Sales Tax Act 1959 Tamil Nadu Act 1 of 1959 , the Governor of Tamil Nadu hereby defers the tax payable under the said Act by Thiruvalargal Southern Agrifurane Industries Limited, Madras for a period of one year from the 1st October 1993 subject to the companydition that the deferred tax shall be paid over a period of five years in equal instalments after a moratorium of one year, that is from 1st October 1995 to 30th September 2000.
