CENTRAL COAL FIELDS LTD. Vs. STATE OF JHARKHAND

JUDGEMENT

(1.) The petitioner, a Company registered under the Companies Act, 1956 was assessed for the assessment year 1998 -99 under the Central Sales Tax Act. The Petitioner has challenged that assessment in an appeal before the appellate authority under the Act. The Petitioner sought a stay of recovery of the tax assessed pending disposal of the appeal. An order of stay was passed to the effect that if the Petitioner pays a sum of Rs. 50 lacs within the time fixed by that order, the recovery of the balance, amounting to something more than 2.5 crores would remain stayed pending disposal of the appeal. The petitioner did not deposit the amount in terms of the above interim order. The petitioner filed a revision against that interim order and it is said that the revision is pending.

(2.) SINCE the Petitioner failed to take advantage of the interim order of stay granted by the appellate authority by failing to fulfil the conditions imposed by that order, the authority under the Act took steps for recovery of the tax assessed. In terms of Section 27 of the Bihar Finance Act, 1981, a notice of demand was served on the Branch Manager of the Punjab National Bank/Ramgarh informing the Bank that a sum of Rs. 3,60,71,293/ - was due from the Petitioner towards tax and Petitioner had failed to make the payment. Hence the money was liable to be paid from out of the funds of the assessee held by the Bank. Under the notice (Annexure -3) the Bank was directed not to pay the amount to the assessee and further to pay over the amount to the authority under the Act towards the liability to tax, of the assessee. It is thereupon that the Petitioner has approached this Court with the present Writ Petition essentially challenging the notice of demand issued by the authority under Section 27 of the Bihar Finance Act.

(3.) COUNSEL for the Department submits that the Petitioner had not fulfilled the conditions imposed by the interim order passed by the appellate authority and hence the recovery proceedings were rightly initiated and they can be continued. It is submitted that the order issued to the Punjab National Bank was strictly in terms of Section 27 of the Bihar Finance Act. In terms of the Bihar Finance Act there is nothing illegal in issuing such a notice. It is further submitted that no plea based on SICA or alleged approach to BIFR was put forward at any stage specially before the appellate authority when it passed the interim order and even before the revisional authority where the order of the appellate authority is challenged. It is submitted that even in the Writ Petition there in no clear pleading of facts to show that the Petitioner is a sick industrial Company as defined in Section 3(1)(O) of SICA. It is also submitted that the claim based on Section 22 of SICA was made without bonafides and the approach to BIFR was a mere ruse to avert the recovery proceedings. It is submitted that Section 22 of SICA cannot bar the issuance of a restraint order to the Bank and that even recovery of sales -tax due to State would not be affected by the pendency of the proceedings under SICA. Finally, it is submitted that there is no reason why this Court should interfere at this stage since the Petitioner can raise this question before the revisional authority in the pending revision.