- (1.) In this application under Section 8 of the West Bengal Taxation Tribunal Act, 1987, the applicants have prayed for an order quashing the seizure of files and documents made by respondent No. 2 at the applicants' factory premises on March 7, 1997.
(2.) The case of the applicants is that applicant No. 1 is a company within the meaning of the Companies Act, 1956. Applicant No. 2 is the vice-president and company secretary of applicant No. 1. The applicant-company is a manufacturer of carbonless paper, continuous computer form and other allied products having its factory situated at Kamdevpur, 24-Parganas (North). The applicant-company is registered under the Bengal Finance (Sales Tax) Act, 1941 (in short, "the 1941 Act"). Since its inception in 1989, the applicant had been incurring heavy losses and the company became a sick company during the year 1991. In February 1993, the applicant-company had made a reference to the Board for Industrial and Financial Reconstruction (in short, "the BIFR") under Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 (in short, "the SICA Act"). By a letter dated September 19, 1995, the BIFR informed the chairman of the applicant-company that the reference made by the company had been registered as Case No. 69 of 1995. By an order dated November 10, 1995, the BIFR appointed the Industrial Reconstruction Bank of India (in short, "the IRBI") as an operating agency for a feasibility study and to examine the viability and submit a study report of the company. The BIFR declared, by the same order, the applicant-company as a sick company under the provisions of Section 5(1)(o) of the SICA Act. In August, 1996, the Government of West Bengal in the Industrial Reconstruction Department expressed their views regarding the reliefs/concessions to be given to the applicant-company on behalf of the State Government on the draft rehabilitation scheme. One of the proposals expressed by the Government of West Bengal, in the Industrial Reconstruction Department, was that only arrear sales tax dues were considerable to be converted into a loan carrying interest at 8.75 per cent. per annum with a rebate at 2 per cent. per annum for timely repayment. This proposal of the Government of West Bengal has been recorded in the minutes of the meeting held on August 12, 1996, at the office of the IRBI. The applicant addressed a letter to respondent No. 2 on October 5, 1996, stating that applicant No. 1 had made a reference to the BIFR which has been registered as a sick industrial company with BIFR as Case No. 69 of 1995. It was also mentioned that IRBI had been appointed as the operating agency by the BIFR for feasibility study. The proposal of the Government of West Bengal in Industrial Reconstruction Department contained in their letter dated August 9, 1996, was also mentioned in the communication. Applicant No. 1 requested respondent No. 2 to issue the assessment order against the demand notices for the year ending March 31, 1994, and to hand over the same to the representative of the applicant.
(3.) On or about December 30, 1996, applicant No. 1 received memo No. 10486 issued by respondent No. 2 in connection with the default made by the applicant with regard to the submission of returns. Applicant was directed to appear before respondent No. 2 by January 10, 1997, failing which, it was informed, the matter would be decided ex parte and penal action would be taken against the applicants. The applicant duly appeared before respondent No. 2 and submitted that in a meeting with the Government of West Bengal in the Industrial Reconstruction Department it has been proposed that arrear sales tax dues would be converted into loan carrying an interest, This was reiterated in writing by a letter dated January 11, 1997, addressed to respondent No. 2. The applicants requested respondent No. 2 to consider the case as a special one and not to take any further official action for the interest of the employees. It is also to be noted that in a joint meeting organized by the Government of West Bengal on the January 10, 1997, under the directive of the BIFR it was further confirmed by the Government of West Bengal that the applicant is a sick unit and is entitled to the reliefs and concessions given by the Government of West Bengal.;