2008 INSC 0213
                                    SUPREME COURT OF INDIA

                                           Kanoria Industries Ltd

                                                      Vs.

                                        State of Karnataka & Ors.

                                            C.A.No.763 of 2008

                                  (Altamas Kabir and J.M.Panchal,JJ.)

                                                 25.01.2008

                                                   ORDER

[Arising out of SLP(C) No.107 of 2007]

1. Leave granted.

2. This appeal is directed against the final judgement and order passed by the Karnataka High
Court on 14/08/2006 dismissing the Writ Appeal as also the Writ Petition filed by the
appellant challenging a demand notice issued by the Government of Karnataka under Section
9 of the Karnataka Tax on Entry of Goods Act, 1979. The appellant took a stand before the
High Court that it had been declared as a sick company by the Board for Industrial and
Financial Reconstruction on 02/06/2000 and that in view of Section 22 of the Sick Industries
(Special Provisions) Act, 1985, the appellant was protected from any coercive action for
recovery of the dues.

3. On 19/02/2007 when the notice was issued on the special leave petition, an interim order
was passed for stay of the recovery proceedings, in view of the submission made that a
Rehabilitation Scheme, as prepared by the Operating Agency, was under process.

4. Today when the matter is taken up, it has been shown to us that the proposed scheme was
finally approved by the aforesaid Board on 20th September, 2007 and that the Government of
Karnataka had also participated in the proceedings which led to the framing of the Scheme.
At paragraph 8(4) of the Scheme, the conditions relating to the dues of the Government of
Karnataka had been set out and under clauses (a), (b) and (c) the matter relating to payment
of sales tax dues, including Entry tax, has also been indicated. Learned counsel appearing for
the State of Karnataka does not dispute the fact that such a scheme has been approved and
that the Government of Karnataka has also agreed to the terms which have been referred to
hereinabove.

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5. Having regard to the above, we dispose of this appeal by granting leave to the Government
of Karnataka to realize its dues in terms of the aforesaid scheme, and in case of default, to
proceed in accordance with law to recover the same. There shall be no orders as to costs.

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