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IN THE HIGH COURT OF DELHI AT NEW DELHI

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Judgment delivered on: 09.08.2023

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W.P.(C) 4876/2017 & CM APPL. 21131/2017

PR DIRECTOR GENERAL OF INCOME TAX

(ADMN & TPS)

..... Petitioner

Versus

M/S THE INDIAN PLYWOOD MFG. CO.

PVT. LTD. & ANR.

..... Respondents

Advocates who appeared in this case:

For the Petitioner

: Mr. Shlok Chandra, Sr. Standing Counsel,

Ms. Priya Sarkar, Jr. Standing Counsel with

Mr. Keshav Garg, Advocate.

For the Respondents

: Mr. Anunaya Mehta and Mr. Vinayak

Thakur, Advocates.

CORAM

HON’BLE MR JUSTICE VIBHU BAKHRU

HON’BLE MR JUSTICE AMIT MAHAJAN

JUDGMENT

VIBHU BAKHRU, J

Introduction

1.

The Principal Director General of Income Tax (Admn. & TPS)

[hereafter‘DGIT’] has filed the present petition impugning an order

dated 01.07.2016 (hereafter ‘impugned order’) passed by the Board

Digitally Signed

By:DUSHYANT

RAWAL

Signing Date:10.08.2023

Signature Not Verified

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for Industrial and Financial Reconstruction (hereafter ‘BIFR’) in

Case No.53/1995 relating to respondent no.1 – M/s The Indian Plywood

Mfg. Co. Pvt. Ltd. (hereafter ‘the Company’).

2.

In terms of the impugned order, the BIFR had directed the

Income Tax Authorities to comply with its earlier order dated

26.02.2013 within a period of 45 days.

3.

The aforesaid order dated 26.02.2013 passed by the BIFR

modified the Rehabilitation Scheme (hereafter ‘the Scheme’), which

was approved by the BIFR under Section 18(5) of the Sick Industrial

Companies (Special Provisions) Act, 1985 (hereafter ‘SICA’) by an

order dated 13.02.2001. The Scheme was amended to the limited extent

of including additional exemptions from payment of income tax under

the Income Tax Act, 1961 (hereafter ‘IT Act’).

The controversy

4.

The DGIT assails the impugned order, essentially, on two fronts.

First, that further concessions, as contemplated in the order dated

26.02.2013, could not be granted as the Scheme had come to an end.

According to the DGIT no further concessions could be considered or

granted without extending the term of the Scheme. Second, that in terms

of the order dated 26.02.2013, the Scheme was modified to require the

Income Tax Department to consider the grant of further concessions as

specified in the said order and there is no requirement to necessarily

grant the same.

Digitally Signed

By:DUSHYANT

RAWAL

Signing Date:10.08.2023

Signature Not Verified

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5.

The DGIT preferred an appeal¹ against the impugned order

before the Appellate Authority for Industrial and Financial

Reconstruction (hereafter ‘AAIFR’) under Section 25 of SICA.

However, in terms of the Sick Industrial Companies (Special

Provisions) Repeal Act, 2003 (hereafter ‘the Repeal Act’), which came

into force with effect from 01.12.2016, SICA stood repealed and the

DGIT’s appeal before the AAIFR stood abated. Thus, the DGIT has

filed the present petition praying that the directions to comply with the

order dated 26.02.2013 – which is construed by the Company as a

direction to grant further concessions – be set aside.

6.

Mr. Mehta, learned counsel appearing for the Company contested

the present petition on several grounds. First, he submitted that the

present petition is not maintainable. According to him, since the

remedy of an appeal against any revival scheme or an order of the BIFR,

under Section 25 of SICA, is no longer available as a result of the

legislative repeal of SICA; a challenge to the orders passed by BIFR

would not be maintainable in any other forum as well.

7.

Second, he submitted that in terms of the Insolvency and

Bankruptcy (Removal of Difficulties) Order, 2017², the DGIT’s remedy

would be an appeal before the National Company Law Appellate

Tribunal (hereafter ‘NCLAT’) and it is not open for the DGIT to file a

petition under Articles 226 and 227 of the Constitution of India. He also

1 Appeal No