Case Note & Summary
The appeal arose from an interim order of the Allahabad High Court dated 11.07.2018 in a writ petition filed by VST Industries Limited challenging a demand for interest on arrears of Entry Tax under the U.P. Act 2007. The High Court directed that subject to deposit of 50% of the interest demanded, no coercive measures would be taken against the petitioner until 18.07.2018. The appellant contended that about 33% of the interest amount had already been recovered from it. The Supreme Court noted that the main issue regarding liability of interest under the U.P. Act 2007 had been decided in a connected appeal (Indian Oil Corporation Limited vs. State of U.P. & Others) on the same date. Since the writ petition was still pending before the High Court, the Supreme Court disposed of the appeal by directing that no further recovery of interest be effected against the appellant, and any recovery already made shall be subject to the final outcome of the writ petition. The Court did not interfere with the interim order but provided that the recovery would abide by the final decision.
Headnote
A) Tax Law - Entry Tax - Interest on Arrears - U.P. Act 2007 - The Supreme Court disposed of an appeal against an interim order of the Allahabad High Court which directed deposit of 50% of interest demanded as a condition for interim protection. The Court held that no further recovery of interest should be effected against the appellant, and any recovery already made shall be subject to the final outcome of the writ petition pending before the High Court. (Paras 1-4)
Issue of Consideration
Whether the interim order of the High Court directing deposit of 50% of interest demanded should be interfered with, and whether further recovery should be stayed pending final decision of the writ petition.
Final Decision
The appeal is disposed of providing that no further recovery be effected against the appellant towards the demand of interest on arrears of Entry Tax, and recovery, if any, of the interest from the appellant shall be subject to the final outcome of Writ-Tax No. 961 of 2018 filed by the appellant.
Law Points
- Interest on arrears of Entry Tax
- U.P. Act 2007
- Interim order
- Recovery subject to final outcome
Case Details
2019 LawText (SC) (4) 118
Civil Appeal Nos. 3256 of 2019 (arising out of SLP (C) No.26913 of 2018)
Ashok Bhushan, K.M. Joseph
The State of Uttar Pradesh & Ors.
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Nature of Litigation
Civil appeal against an interim order of the High Court in a writ petition challenging demand of interest on arrears of Entry Tax.
Remedy Sought
The appellant sought to set aside the interim order directing deposit of 50% of interest demanded and to stay recovery of interest pending final decision.
Filing Reason
The appellant challenged the interim order of the High Court which required deposit of 50% of interest as a condition for interim protection against coercive measures.
Previous Decisions
The Allahabad High Court passed an interim order on 11.07.2018 directing deposit of 50% of interest demanded. The writ petition is still pending.
Issues
Whether the interim order of the High Court requiring deposit of 50% of interest demanded should be interfered with.
Whether further recovery of interest should be stayed pending final decision of the writ petition.
Submissions/Arguments
The appellant submitted that about 33% of the interest amount had already been recovered from it.
The appellant argued that the main issue regarding liability of interest under U.P. Act 2007 had been decided in a connected appeal.
Ratio Decidendi
Where an interim order is passed in a pending writ petition and the main issue has been decided in a connected appeal, the Supreme Court may direct that no further recovery be effected pending final decision, and any recovery already made shall be subject to the outcome of the writ petition.
Judgment Excerpts
Subject to deposit of 50% of the interest so demanded by way of recovery dated 26.06.2018 within the next one week, no coercive measure may be taken against the Petitioner till 18th July, 2018.
We are of the view that writ petition of the appellant pending in the High Court need to be finally decided.
In result, this appeal is disposed of providing that no further recovery be affected against the appellant towards the demand of interest on arrears of Entry Tax and recovery, if any, of the interest from the appellant shall be subject to the final outcome of the Writ-Tax No. 961 of 2018 filed by the appellant.
Procedural History
The appellant filed a writ petition before the Allahabad High Court challenging a demand for interest on arrears of Entry Tax. The High Court passed an interim order on 11.07.2018 directing deposit of 50% of interest demanded. The appellant filed SLP (C) No.26913 of 2018 against that interim order, which was converted into Civil Appeal Nos. 3256 of 2019. The Supreme Court disposed of the appeal on 22.04.2019.
Acts & Sections
