A Special Law will prevail over a General Law, more so,when the Special Law contains a non-obstante clause.

 Provisions of Section 32 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) shall prevail, except to the extent excluded, over those of the Income Tax Act.

Delhi High Court in its recent finding has held that the provisions of Section 32 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) shall prevail, except to the extent excluded, over those of the Income Tax Act.

BIFR in the rehabilitation scheme in the instant matter has waived all the penal interest, damages, penalties, charges chargeable in respect of income tax dues. The question that arose for consideration was whether in view of Section 32 of the SICA, order of BIFR waiving interest on income tax liability was beyond jurisdiction, since only the Board through its designate has the authority to waive or remit interest. The Court answered in affirmative, stating that BIFR can waive of interest.

Section 32 of SICA expressly provides that its provisions shall prevail except to the extent excluded. The immunity, or exception from, the non obstante clause, is limited to the provisions of enactments referred in the section. Section 32(1) specifically excludes two enactments and sub-clause (2) expressly refers Section 72A of the Income Tax Act, to say that its provisions apply indicates the legislative intent that provisions of SICA shall prevail over those of the Income Tax Act.

In respect to reference made to CBDT circular No. 683 dated 08.06.1994 which had appointed a nodal authority to coordinate between BIFR and Central Board, it was held that a failure on the part of income tax authorities to inform Director General cannot make the scheme invalid.

M/s. Lord Chloro Alkalies Ltd. vs. DGIT (Admn.) and Anr. (19.07.2013, Delhi HC)