JAGADEESWARAN TEXTILES P LTD Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) THE Original Petition has been filed before the Tribunal seeking for the relief to call for the records on the file of the respondent, the Commercial Tax Officer, Udumalpet (North Assessment Circle) Udumalpet with reference to his proceedings in Form No. 4 issued under Section 25 of SICA Act (demand prior to attachment of the land) dated 20. 3. 2003 on the ground that the demand of Rs. 1,33,72,591/- being arrears of Commercial Taxes due for the assessment year 1989-90 to 2001-2002 on both TNGST and CST.

(2.) THE said demand was assailed on the premise that the petitioner's company has become sick and its liability was over and above its net worth of assets and made a reference under Section 15 (1) of the SICA Act before the Board of Industrial Financial reconstruction (BIFR) on 7. 12. 1994 to declare it as a sick industrial company in terms of 3 (1) (o) of the SICA Act. The BIFR after hearing the parties by giving so many opportunities and revising proposal after proposal, ultimately found that it is not economically viable for the revival of the company by its order dated 23. 1. 1996 recommended for winding up. That order has been carried on by way of an appeal before the AAIFR, but have an order of confirmation only. Even writ petition filed against the order of AIFR before this Court was also dismissed. Hence, the recommendation of the BIFR has been converted into a Company petition in C. P. No. 152 of 2002 under Section 433 (e)and (f) of the Companies Act 1956. Under those circumstances, the impugned demand is not maintainable.

(3.) MR. S. Mohan, learned counsel for the petitioner very strenuously contended that when the company petition is pending before this Court, it is not open for the respondent to issue a notice. However, when a question is posed by this Court what is the stage in which the company petition is pending, learned counsel for the petitioner is not in a position to say about the stage of the case, but abruptly stated that he did not know the stage. Questions are posed by this Court only to know the facts so as to deliver judgment in accordance with the statutory provisions. Article 226 of the Constitution of the India is a discretionary provision is well settled that jurisdiction could be exercised only when the Court is satisfied to do the same. This is a case in which the petitioner has not even cared to say about the stage in which the Company Petition is pending. If the company petition is admitted after hearing, as per the provision of the Company Court Rules, then this Court should have safeguarded the interest of the property by referring the respondent to approach the Company Court. Prior to admission , it is well open to the respondent to recover the amount from the petitioner or petitioner's property as protective umbrella under Section 22 of the SICA Act is also not available under the admitted fact that BIFR has come to the conclusion that it is not viable for revival of the company. The petitioner's company and its Directors are equally responsible for the affairs of the company before the Company Court, even assuming winding up order has been passed. Hence, the petitioner cannot shirk his responsibility by saying that he does not know whether the company petition is pending before this Court or not. For the above said reasons, the writ petition is dismissed. No costs.