M/S. PENNAR INDUSTRIES LTD.versusSTATE OF A.P. & ORS.

                        [2009) 1 S. C.R. 1137


                 MIS. PENNAR INDUSTRIES LTD.                        A
                                  v.
                       STATE OF A.P. & ORS.
                   (Civil Appeal NO. 820 of 2009)
                        FEBRUARY 9, 2009
                                                                    B
           [DR. ARIJIT PASAYAT AND ASOK KUMAR
                        GANGUL Y, JJ]
+
         Interim order- Demand - Pre-deposit of 50% of disputed
    tax as condition to grant stay - Held: While granting stay, c
    pending disposal of the matters, though discretion is
    available, same has to be exercised judicially - Petitions for
    stay should not be disposed of in a routine manner - Forum!
    authority should not pass an order which cannot be sustained
    on the touchstone of fairness, legality and public interest - D
    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
    - On facts, appellant deposited Rs. 60 lacs as directed by
    Supreme Court - Writ petition was heard and judgment was E
    reserved - In the peculiar circumstances of the case till the
    disposal of the writ petition, there shall not be any further
    deposit -Tax/Taxation - Andhra Pradesh Tax on Entry of
    Goods into Local Areas Act, 2001.

        The appellant has challenged the order of High Court
                                                                    F
    directing payment of 50% of the disputed tax as
    condition for grant of interim stay.

        Disposing of the appeal, the Court
                                                                    G
        HELD: 1. While granting stay pending disposal of the
    matters, though discretion is available, the same has to
    be exercised judicially. It is true that on merely
    establishing a prima facie case, interim order of
                                1137                                H
    1138      SUPREME COURT REPORTS             [2009] 1 S.C.R.


A 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
B 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. The forum/authority
c should not 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. [Paras 5 and 7) [1140-B; 1140-D-G)
0
       *Sil/iguri Municipality and Ors. v. Amalendu Das and Ors.
  AIR 1984 SC 653; Mis 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,
E referred to

       2. It has become an unfortunate trend to casually
  dispose of stay applications by referring to decisions in
  *Siliguri Municipality and **Dunlop India cases without
F analysing factual scenario involved in a particular case.
  [Para 8) [1140-G-H]

       3. This court had directed on 10.12.2007 to deposit
  Rs. 60 lacs with assessing officer. It is not in dispute that
  amount was deposited. It is pointed out for the appellant
G that the writ petition was heard and the judgments are
  awaited. In the peculiar circumstances of the case, till the
  disposal of the writ petition, there shall not be
  requirement for any further deposit. [Paras 10 and 11)
  [1141-D-E]
H
     PENNAR INDUSTRIES LTD. v. STATE OF A.P. & ORS.             1139


                          Case Law Reference:                           A
         AIR 1984 SC 653              referred to          Para 6

         AIR 1985 SC 61               referred to          Para 6

         AIR 1985 SC 330              referred to          Para 6
                                                                        B
         CIVIL APPELLATE JURISDICTION: Civil Appeal No. 820
    of 2009 .
•
        From the final Judgment and Order dated 4.10.2007 of
    the High Court of Andhra Pradesh at Hyderabad in W.P. No.           c
    20765 of 2007.

         K.V. Bharathi Upadhyaya for the Appellant.

         I. Venkatnarayana, Manoj Saxena, Rajneesh Kr. Singh,
    Rahul Shukla and T.V. George for the Respondents.                   D

         The Judgment of the Court was delivered by

         DR. ARIJIT PASAYAT, J. 1. Leave granted.

         2. Challenge in this appeal is to the judgment of a Division   E
    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       F
        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            G
    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 AP. Tax on Entry of Goods into Local            H
    1140         SUPREME COURT REPORTS                 (2009] 1 S.C.R.


A 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
8 discretion is available, the same has to be exercised judicially.

       6. The applicable principles have been set out succinctly
  in Silliguri Municipality and Ors. v. Amalendu Das and Ors.
  (AIR 1984 SC 653) and Mis Samarias Trading Co. Pvt. Ltd.
C v. S. Samuel and Ors. (AIR 1985 SC 61) and Assistant
  Collector of Central Excise v. Dunlop India Ltd. (Al R 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
0
  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
E 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             •
F 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.
G
        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.
H
       ,
 PENNAR INDUSTRIES LTD. v. STATE OF A.P. & ORS.                  1141
            [DR. ARIJIT PASAYAT, J.)

    9. It appears that this Court by order dated 10.12.2007              A
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.                   8
       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.
                                                                         c
            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
                                                                         0
that the writ petition has been heard and the judgments are
awaited.

       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            E
protection we are not expressing any opinion on the merits of
the case.

       12. The appeal is disposed of accordingly.

D.G.                                          Appeal disposed of.        F