IMPORTANT POINT
The bar or embargo envisaged in Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985, can apply only to such of those dues reckoned or included in the sanctioned scheme and amounts like sales tax, etc., which the sick industrial company is enabled to collect after the date of the sanctioned scheme cannot be intended to be covered u/s. 22 of the Act.

JUDGMENT

Paripoornan, J.-Special leave granted.

2. Respondents 1 to 4 in writ petition No. 21973 of 1995 before the High Court of Andhra Pradesh, representing the Commercial Tax Department, Andhra Pradesh, are the appellants in this appeal. The petitioner and respondents 5 and 6 in the writ petition are respondents 1 to 3 in this appeal. This appeal is filed against the judgment and order of the High Court of Andhra Pradesh dated 4.11.1995.

3. The petitioner in the writ petition is M/s. Corromandal Pharmaceuticals Ltd. The said company manufactures and markets bulk drugs and formulations. It was declared as a sick industrial company under the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as the Act (Act No. 1 of 1986) by the Board for Industrial and Financial Reconstruction (shortly called BIFR ). The Industrial Reconstruction Bank of India (shortly called IRBI ) has been appointed as the operating agency. The BIFR sanctioned a scheme for the rehabilitation of the petitioner in case No. 160 of 1988 in exercise of its powers under Section 18(4) read with Section 19(3) of the Act after obtaining the consent of the concerned financial institutions, on 19.11.1990. The said sanctioned scheme was brought into force with immediate effect. It was modified later on 29.12.1993. Shortly stated, the said sanctioned scheme for rehabilitation of the company is under implementation.

4. The petitioner-company is an assessee to sales tax under the Andhra Pradesh General Sales Tax Act, 1957. It was assessed for the assessment years 1992-93 by order dated 3.1.1994 and for the year 1993-94 by order passed in 1995. The Sales Tax authorities initiated action under Section 17 of the Andhra Pradesh General Sales Tax Act for recovery of the said dues. It is seen that appeals were preferred from the assessment orders and the appellate authority granted a conditional order of stay to pay the tax assessed in instalments. Even then, there was default. For the aforesaid two years, the sales tax arrears due from the petitioner-company, is stated to be Rs. 9,53,833/-. It is brought to our notice that there are sales tax arrears for the years 1986-87 to 1992-93, but those arrears are not in question in this appeal. We are concerned only with the collection of the balance of tax Rs. 9,53,833/- due for the assessment years 1992-93 and 1993-94. As stated, the assessment orders for the said years were passed on 3.1.1994 and in 1995 - long after the scheme was sanctioned by the BIFR on 19.11.1990.

5. The petitioner-company assailed the recovery proceedings for the sales tax dues before the High Court. It prayed for the issue of a writ of mandamus directing the first and second respondents (Commercial Tax Authorities) not to proceed with the collection of balance sales tax amount of Rs. 9,53,833/- without the permission of BIFR, as required under Section 22 of the Act (Act No. 1/86), and for other reliefs. The plea of the petitioner was that the sanctioned scheme by BIFR for rehabilitation of the company is under implementation, and so, no proceedings for execution, distress or the like against the company, shall lie except with the consent of the Board. According to the Revenue, the arrears of the sales tax in question relate to the period after the sanctioned scheme was brought under implementation and that the legal embargo/bar under Section 22 of the Act is inapplicable since Section 22 of the Act can apply only in respect of the sales tax dues included in the "sanctioned scheme". Only those dues which were included in the "the package" in the sanctioned scheme will be governed by the said bar. The High Court considered the rival pleas in the light of the relevant statutory provisions, a few decisions of this Court and of other High Courts, and held that there is no warrant to import the limitation as contended by the Revenue in applying Section 22 of the Act and that no coercive steps for the purpose of recovery of tax dues i