S.Parvatha Rao, J. - (1.) The petitioner-company manufactures and markets bulk drugs and formulations. It was declared as a sick industrial company under the Sick Industrial Companies (Special Provisions) Act, 1985 ("the Act", for short), by the Board for Industrial and Financial Reconstruction ("the BIFR", for short) and the Industrial Re-construction Bank of India (IRBI) has been appointed as the operating agency. By order dated 19/11/1990, in Case No. 160 of 1988 the BIFR sanctioned the scheme for the rehabilitation of the petitioner in exercise of its powers under sub-section (4) of section 18 and sub-section (3) of section 19 of the Act after obtaining the consent of the financial institutions, i.e., IRBI and the Andhra Pradesh Industrial Development Corporation (APIDC), and the said scheme was designated as "the sanctioned scheme" and was bought into force with immediate effect. The sanctioned scheme was modified by the BIFR as indicated in its letter dated 28/12/1993, by granting certain additional reliefs. It was also stated in the said letter that the company was expected to make its net worth positive in the year 1995-96 and wipe out the accumulated losses in the year 1997-98. It is the case of the petitioner that there were delays in the implementation of the rehabilitation scheme and that certain modifications to the sanctioned scheme are at present under processing and consideration of the operating agency, i.e., IRBI and the BIFR. Thus, it cannot be disputed that the sanctioned scheme for the rehabilitation of the petitioner is under implementation.
(2.) The petitioner defaulted in the payment of sales tax assessed under the Andhra Pradesh General Sales Tax Act, 1957 ("the APGST Act", for short) for the assessment years 1992-93 and 1993-94 and the sales tax authorities have initiated action under section 17 of the APGST Act for the recovery of the said dues. It is stated on behalf of the petitioner that it preferred appeals to the fourth respondent in respect of the said assessments and also sought stay of collection of tax pending the said appeals and that the same are pending and that the stay petitions have not yet been disposed of. It is further stated that the petitioner approached the third respondent for grant of instalments for payment of the arrears of sales tax and that the third respondent by his proceedings dated 3/10/1994, granted six bi-monthly instalments at the rate of Rs. 2.10 lakhs with effect from 15/01/199 5/11/1995. It is not in dispute that the petitioner could pay only the first instalment in January, 1995. It is stated on behalf of the petitioner that the second respondent issued notice dated 24/07/1995, under section 17 of the APGST Act to the sixth respondent herein directing it to pay the amount payable by it to the petitioner towards sales tax arrears of Rs. 9,53,833 due from the petitioner. Proceedings under the Andhra Pradesh Revenue Recovery Act, 1864, have also been initiated against the petitioner by issuing distraint order dated 29/07/1995, in form I under section 8 of that Act in respect of sales tax arrears of Rs. 10,35,671 for the years 1986-87 to 1992-93 and another similar distraint order under that Act dated 20/09/1995, in respect of sales tax arrears of Rs. 10,39,730, which includes the arrears mentioned in the earlier distraint order. Aggrieved by the proceedings initiated by the sales tax authorities for the recovery of the sales tax dues, the petitioner has approached this Court by way of the present writ petition for a writ of mandamus directing the first and second respondents not to proceed with the collection of the balance tax of Rs. 9,53,833 without the permission of the BIFR as required under section 22 of the Act and directing the fifth respondent to permit the petitioner to operate on the funds lying in its account No. 14/34789, etc.
(3.) Notice before admission was ordered in the present writ petition on 28/09/1995. The learned Government Pleader for Commercial Taxes took notice on behalf of respondents Nos. 1 to 4. The second respondent herein has filed his counter-affidavit on 20/10/1995, contending that section 22 of the Act does not prevent the sales tax authorities from taking proceedings for collection of the sales tax arrears from the petitioner. On behalf of the petitioner reply affidavit dated 25/10/1995, has been filed by its managing director.;