By the Court.—In these writ petitions the petitioners have prayed for quashing the recoveries issued by the Assistant Collector, Grade-I, Saraswati Vihar, Delhi, against them on the directions of the Deputy Commissioner (Assessment) Trade Tax-8, Ghaziabad for recovering trade tax dues of Rs. 2,95, 67, 763/- including interest vide recovery certificate dated 4.4.2000 and Rs. 14, 79, 90, 000/-; and Rs. 1, 50, 000/- vide recovery notice dated 14.7.2005 annexed to the writ petitions.

2. We have heard Shri Kunwar Saksena, learned counsel appearing for the petitioners. Shri S.P. Kesarwani, Additional Chief Standing Counsel appears for the State respondents.

3. Brief facts giving rise to the writ petitions are that the petitioners were directors in M/s Maharashtra Steels Limited-a Public Limited Company, South of G.T. Road, Ghaziabad, engaged in manufacture of Iron and Steel. The unit suffered losses on which it was declared as ‘sick industrial unit’ by the Board of Industrial Finance and Reconstructing, under the Sick Industrial Undertakings (Special Provisions) Act, 1985. A revival scheme was prepared in which the industrial unit was proposed to be run on the fresh infusion of finances to be provided by the Industrial Finance Corporation of India (IFCI).

4. Shri I.S. Gambhir, the Director of the company and Shri A.S. Solanki, the Managing Director applied for registration under Section 8-A of U.P. Trade Tax Act, 1948 as well as Section 7 of the Central Sales Tax Act, 1956. In the statement given on oath by the representative of Shri I.S. Gambhir on 20.4.1991, it was stated that the company was under BIFR of which Shri I.S. Gambhir is the new promoter. It was stated in the statement recorded on Registration Form No. 14, that the entire machines are new. An application under Section 4-A was submitted by Shri A.S. Solanki (Managing Director) wherein it was represented/declared/certified that all the plants, machineries, equipments, apparatus and components have not been used or acquired for use in any other factory or workshop in India before installation in the unit.

5. The application for grant of Eligibility Certificate for exemption from Trade Tax, was considered by the Divisional Level Committee, and was rejected by the order dated 18.12.1995 on the ground that the alleged unit was not eligible for exemption, besides the fact that it is lying closed for more than six months with huge arrears of tax, and that the directors are totally non-cooperative. They did not appear in the assessment proceedings inspite of repeated notices issued to the company.

6. The assessment orders for both the U.P. and Central Sales Tax were passed for the assessment years 1991-92 to 1995-96. During the assessments the petitioners did not produce any books of accounts. They simply sent a letter dated 13.2.1996, that the records are with the Excise Department. The assessment orders were framed on 20.2.1996, 26.3.1996, and 22.2.1997, with which the assessments were completed. In the assessments, it was found that the company had utilised 1365 Forms 31, 42 Forms-C in the assessment year 1991-92; 3500 Forms-31, 50 Forms-C and 130 Forms 3-B in the year 1992-93; 1800 Forms 31 and 100 Forms 3-B in the year 1993-94, and 275 Forms-31 in the year 1994-95. An evasion of Rs. 16.2 crores of dues towards Central Excise Department was reported in the year 1994-95.

7. The Assessing Authority received letters dated 3.8.1998, 2.11.1998 and 25.12.1998 sent by the Superintendent of Police, U.P. Vigilance, Meerut requesting the Assessing Authority to provide records relating to the petitioners’ company as the company committed theft of electricity of about Rs. 15 crores for which a first information report was lodged by the Executive Engineer, Vidyut Nagriya Khand-I, Ghaziabad in P.S. Kotwali, District Ghaziabad on 28.11.1993. The Executive Engineer, Electricity Department reported theft of Rs. 1, 16, 73, 842 units of electricity between 30.5.1993 to 25.11.1993 (in