ELECTREX INDIA LIMITED Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) The petitioner has challenged the assessment orders relating to the assessment years 1995-1996 to 2007-2008 passed under the provisions of the Karnataka Tax on Entry of Goods Act, 1979, Karnataka Sales Tax Act, 1957, Karnataka Value Added Tax Act, 2003 and Central Sales Tax Act, 1956 and the demand notice dated 18.01.2018 issued by the respondent No.3 in pursuant to the aforesaid assessment orders.

(2.) The petitioner is a Company incorporated under the provisions of the Companies Act, 1956 inter alia engaged in the business of manufacturing and sale of lighting equipment, electrical equipment, tools, drills, wrenches, hammers and other automobile electric tools etc.,

(3.) It is submitted that the petitioner during the year 1996-97 undertook an expansion programme in anticipation of high growth and market demand, however could not sustainably run its business and was referred to the Board of Industrial and Financial Reconstruction ('BIFR' for short) on 18.07.2000. Subsequently, on 31.10.2001, the petitioner company was declared sick in terms of the Sick Industrial Companies (Special Provisions) Act, 1985. In the said proceedings, the petitioner company could not take steps to assail the assessment orders. However, the petitioner's aggregate tax liability was computed at Rs.11,92,01,000/- (Rupees eleven crores ninety two lakhs one thousand only) and inclusive of interest, stood at Rs.42,91,69,000/- (Rupees forty two crores ninety one lakhs sixty nine thousand only). The operating agency- Canara Bank directed the petitioner to reconcile its accounts with the claims of the respondents 2 to 4 since the petitioner did not had significant amount of sales turnover so as to attract tax liabilities aggregating to Rs.11,92,01,000/- (Rupees eleven crores ninety two lakhs one thousand only). Before the petitioner company could make efforts to reconcile the accounts, the respondent Nos.2 to 4 had initiated coercive recovery proceedings against the petitioner.