REPORTABLE

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

J U D G M E N T

Dr. ARIJIT PASAYAT, J.

1. Leave granted.

2. Challenge 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.”

3. In 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.  

4. Learned 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.  

5. Principles  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 judicially.

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6. The  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).

7. It 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

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private  injury  or  shake  a  citizens’  faith  in  the  impartiality  of  public

administration, interim relief can be given.

8. It  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.             

9. It  appears  that  this  Court  by  order  dated  10.12.2007  passed  the

following order:

“Issue notice.

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.”  

10. It 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.  

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11. In  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.  

12. The appeal is disposed of accordingly.  

………………………………J. (Dr. ARIJIT PASAYAT)

……………………………..J. (ASOK KUMAR GANGULY)

New Delhi, February 09, 2009   

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