Holding

The Supreme Court held that the attachment order fully safeguards the respondent’s interest, so the High Court’s order requiring a 50% deposit is set aside.

Summary

The appellant, R. Balasubramaniam, purchased a property and was assessed sales tax arrears of Rs.83,53,477, including penalties. He challenged the assessment in a writ petition, which was dismissed, and then filed a writ appeal that remained pending before the Madras High Court. During the pendency of the appeal, the High Court ordered the appellant to deposit 50% of the tax due as a condition for maintaining a stay, failing which the stay would be vacated. The appellant appealed to the Supreme Court, contending that the order was unnecessary because the property had already been attached. The Supreme Court held that the attachment order fully safeguards the respondent’s interest, rendering the High Court’s deposit order unnecessary, and set aside that order, directing the High Court to dispose of the writ appeal on its merits. The attachment order was ordered to continue until the writ appeal is finally decided.

Issues considered

Whether the High Court's interim order directing the appellant to deposit 50% of the tax due is valid despite the attachment of the property.
Whether the attachment order sufficiently safeguards the respondent's interest during the pendency of the writ appeal.
Whether the Supreme Court can set aside the High Court's interim order and direct disposal of the writ appeal on merits.

Subjects

sales tax arrearsproperty attachmentinterim orderstay of proceedingsdeposit requirementwrit appealSupreme CourtHigh Court

Judgment

A R. BALASUBRAMANIAM
.
v.
ADDITIONAL DEPUTY COMMERCIAL TAX OFFICER

MARCH 9, 2007

B [DR. AR. LAKSHMANAN AND AL TAMAS KABIR, JJ.]

Taxation: ' ~-

c filed byDemand of tax arrears pursuant to purchase of property-Writ petition
assessee-appellant dismissed-Writ appeal-Interim order passed by
High Court granting stay subject to assessee depositing 50% of the total tax
assessed-During pendency of appeal before Supreme Court, property
purchased by assessee attached-Held: Interest of Respondent is fully
safeguarded by the said order of attachment-Therefore, order of deposit by
D High Court set aside-High Court to dispose of Writ Appeal on merits and
in accordance with lm;,__Attachment order to continue till disposal of writ
appeal-Interim order.

Assessment proceedings were initiated demanding tax arrears pursuant
to purchase of property by Appellant-assessee. Appellant filed writ petition
E before High Court challenging the assessment proceedings. The writ petition
was dismissed. Appellant filed Writ appeal which is pending final disposal
before the High Court. During pendency of the Writ Appeal, High Court
directed the Appellant to deposit 50% of the total tax due to the respondent.
The said interim order of the High Court has been challenged in the present
F appeal
~·

Disposing of the appeal, the Court

HELD: This Court while ordering notice to the respondent ordered
attachment of the property purchased by the appellant shall continue and no
G further steps will be taken until further orders by this Court. Since there is •
an order of attachment during the pendency of Appeal in this Court, the -;._
interest of the respondent is fully safeguarded by the said Order. Therefore,
the order passed by the High Court ordering deposit of 50% of the total tax
due is set aside and the High Court is requested to dispose of Writ Appeal

H 890
R. BALASURRAMANIAM '·ADDITIONAL DEPUTY COMMERCIAL TAX OFFICER [LAKSHMANAN. J) 89]
filed by the appellant on merits and in accordance with law. It is also made A
... clear that the attachment order passed by this Court will continue till the
disposal of the Writ Appeal. IParas 4 and 5) 1892-D, E, Fl

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1244 of2007.

From the Final Judgment and Order dated 22.08.2005 of the Madras High B
Court (Madurai Bench, Madurai) in W.A. Misc. Petition (MD) No. 153 of2005
in W.A. (MD) No. 130 of2005.

Immanuel, J.C. Rose and B. Partha Sarthy for the Appellant.

R. Nedumaram for the Respondent. c
The Judgment of the Court was delivered by

Dr. AR. LAKSHMANAN, J. 1. Leave granted.

2. Heard Mr.Immanuel, learned counsel for the appellant and D
Mr.R.Nedumaran, learned counsel for the respondent.

3. We have perused the order impugned in this appeal which reads
thus:-

"ORDER
E
This petition coming on for orders upon perusing the petition and
the affidavit filed in support thereof and upon hearing the arguments
of Mr. A. Immanuel, Advocate for the petitioner, the Court made the
following order:-

Heard both side.
F
2. Interim stay is made absolute subject to the condition that the
petitioner/appellant deposits 50% of the total tax due to the
respondent within a period of eight weeks, failing which the stay
granted shall stand automatically vacated."
G
4. The matters relates to the sales tax arrears of vendee-appellant.
According to the appellant, the sales transaction was completed in the year
2000 and the proceedings were initiated against him by a notice issued by the
Addi.Deputy Commercial Tax Officer- Iii, Tuticom on 31.07.2002 and an
assessment order was passed 06.12.2004 against the assessee M/s.Blesso H
892 SUPREME COURT REPORTS (2007] 3 S.C.R.

A Construction and P.J. Engineering Constructions fixing the total tax due at +.
Rs.83,53,477/- by way of tax arrears including penalty etc. A Demand Notice >--

was issued to the appellant-assessee R.Balasubramaniam to pay the arrears
of tax due since the appellant has purchased the property and is in possession
of the property in S.No.495/1 A2, 495/182. It is not in dispute that the
appellant has purchased the property in question for Rs.4,90,0001- as could
B be seen from the sale deed. According to the appellant, he was a bonafide
purchaser. It is also not in dispute that against the dismissal of the Writ
Petition filed by the appellant challenging the said assessment, the appellant
preferred the Writ Appeal which is pending final disposal before the Higl\
Court and during the pendency of the Writ Appeal, the Division Bench of the
• ;

c High Court directed the appellant to deposit 50% of the total tax due to the
respondent within a period of eight weeks, failing which the stay granted shall
stand automatically vacated. Aggrieved by the said interim order, the appellant
preferred the above appeal in this Court and this Court on 28.11.2005 while
ordering notice to the respondent ordered attachment of the property purchased·
by the appellant shall continue and no further steps will be taken until further
D orders by this Court. Since there is an order of attachment during the
pendency of the Civil Appeal in this Court, the interest of the respondent is
fully safeguarded by the said Order. We, therefore, set aside the order passed
by the High Court ordering deposit of 50% of the total tax due and request
the High Court to dispose of Writ Appeal filed by the appellant on merits and
E in accordance with law.
5. We also make it clear that the attachment order passed by this Court
will continue till the disposal of the Writ Appeal. The appeal stands disposed
of accordingly.

F B.B.B. Appeal disposed of.
• -I·