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

Citation: [2009] 1 S.C.R. 1137 · Decided: 09-02-2009 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Disposed off
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Judgment (excerpt)

[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 
0 can be given. [Paras 5 and 7) [1140-B; 1140-D-G) 
*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: 
AIR 1984 SC 653 
AIR 1985 SC 61 
AIR 1985 SC 330 
referred to 
referred to 
referred to 
Para 6 
Para 6 
Para 6 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 820 
of 2009 . 
From the final Judgment and Order dated 4.10.2007 of 
A 
B 
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 supp
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