M/S Pennar Industries
Ltd. Vs. State of A.P. & Ors.  INSC 255 (9 February 2009)
IN THE SUPREME COURT
OF INDIA CIVIIL APPELLATE JURISDICTION CIVIL APPEAL NO. OF 2009 (Arising out of
SLP (C) No. 22684 of 2007) M/s Pennar Industries Ltd. .....Appellant Versus
State of A.P. and Ors. ....Respondents
Dr. ARIJIT PASAYAT,
in this appeal is to the judgment of a Division Bench of the Andhra Pradesh
High Court granting partial stay of realization of demand raised against the
appellant. Following order was passed by the High Court:
"On payment of
50% of the disputed tax within a period of six weeks from today by the
petitioner, there shall be interim stay as prayed for. The amount already paid
shall be given credit to."
support of the appeal, learned counsel for the appellant submitted that
appellant is a sick company and therefore the High Court should not have
directed payment of the amount as directed.
counsel for the respondent-State on the other hand submitted that A.P. Tax on
Entry of Goods into Local Areas Act, 2001 (in short the `Act') clearly permits
the levy. In revenue matters this Court should not interfere.
relating to grant of stay pending disposal of the matters before the concerned
forums have been considered in several cases. It is to be noted that in such
matters though discretion is available, the same has to be exercised
applicable principles have been set out succinctly in Silliguri Municipality
and Ors. v. Amalendu Das and Ors. (AIR 1984 SC 653) and M/s Samarias Trading
Co. Pvt. Ltd. v. S. Samuel and Ors. (AIR 1985 SC 61) and Assistant Collector of
Central Excise v. Dunlop India Ltd. (AIR 1985 SC 330).
is true that on merely establishing a prima facie case, interim order of
protection should not be passed. But if on a cursory glance it appears that the
demand raised has no leg to stand, it would be undesirable to require the
assessee to pay full or substantive part of the demand. Petitions for stay
should not be disposed of in a routine matter unmindful of the consequences flowing
from the order requiring the assessee to deposit full or part of the demand.
There can be no rule of universal application in such matters and the order has
to be passed keeping in view the factual scenario involved. Merely because this
Court has indicated the principles that does not give a license to the
forum/authority to pass an order which cannot be sustained on the touchstone of
fairness, legality and public interest. Where denial of interim relief may lead
to public mischief, grave irreparable
private injury or
shake a citizens' faith in the impartiality of public administration, interim
relief can be given.
has become an unfortunate trend to casually dispose of stay applications by
referring to decisions in Siliguri Municipality and Dunlop India cases (supra)
without analysing factual scenario involved in a particular case.
appears that this Court by order dated 10.12.2007 passed the following order: "Issue
Without prejudice to
the claims involved, let the petitioner deposit a sum of Rs.60,00,000/- i.e. Rs.23,00,000/-
, Rs.7,00,000/- and Rs.30,00,000/- in respect of the demands amounting to about
Rs.90,00,000/-, Rs.22,00,000/- and Rs.1,06,00,000/- within a period of three
months with the assessing officer.
Realization of the
balance shall be stayed if the deposit is made, as directed."
is not in dispute that the aforesaid amounts have been deposited. It is pointed
out by learned counsel for the appellant that the writ petition has been heard
and the judgments are awaited.
the peculiar circumstances of the case we direct that till the disposal of the
writ petition, there shall not be requirement for any further deposit. It is
made clear that by giving this protection we are not expressing any opinion on the
merits of the case.
appeal is disposed of accordingly.
(Dr. ARIJIT PASAYAT)