(1.) 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
(2.) The appellant-company is a registered dealer under the Tamil Nadu General Sales tax Act, 1959. Sometime in 1988 proceedings were commenced in respect of the appellant under the Sick Industries Companies (Special Provisions) Act, 1985 (referred to hereafter as SICA). 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. Under the heading, "cost of the scheme and means of financing", the BIFR noted the requirement of funds for the rehabilitation of the appellant and the means of finance. As far as the requirements of funds are concerned it was assessed at Rs. 1491 lacs. To meet this requirement, the means of finance from three sources were identified, namely; 1. Interest from secured loans Rs. 568,00,000 2. Promoters and new some items rights of issue of equity capital Rs. 300,00,000 (Promoters quota and rights issue of equity capital ) 3. Deferment of sales tax by Govt. of Tamil Nadu Rs.- 623,00,000 total = Rs. 1491,00,000
(3.) 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 lacs approx). The deferred amount of sales-tax as above shall be repayable during the 3 years period from July 1, 1994 to June 30,1997. " on 23rd September, 1993 the State Government intimated the BIFR that having considered 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. 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 lacs 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 scheme was approved by the State government by GO Ms. No. 5 dated 7th january, 1994 and on 4th March, 1994 a notification was published by the State government in the official gazette which reads:-