R. Balasubramaniam v. Additional Deputy Commercial Tax Officer

Case Details & Bench

Court: High Court
Hon'ble Judges: Dr. AR. Lakshmanan
Al Tammas Kabir
Judgment Date: 2007-03-09
Court Decision / Holding: The Supreme Court set aside the High Court’s order directing deposit of 50% of the total tax due and held that, given the attachment, the respondent’s interest was adequately safeguarded. The attachment order would continue until the disposal of the writ appeal, and the High Court is to dispose of the writ appeal on merits in accordance with law. The appeal stands disposed of accordingly.
Final Disposition: Appeal disposed of

Parties to the Case

Appellants / Petitioners

R. Balasubramaniam

Respondents

Additional Deputy Commercial Tax Officer

Legal Representation & Advocates

Counsels for Petitioners

• Immanuel
• J.C. Rose
• B. Partha Sarthy

Counsels for Respondents

• R. Nedumaram

Case Synopsis & Summary

This Supreme Court case concerns tax arrears arising from a sale of property and the challenge to assessment proceedings. The appellant-purchaser acquired property in 2000; sales tax assessments totaling Rs. 83,53,477 (including penalties) were levied by the department, and a notice demanding arrears was issued. The appellant challenged the assessment in a writ petition before the Madras High Court, which was dismissed, and a writ appeal was later filed and pending. During the pendency of the writ appeal before this Court, the High Court directed the appellant to deposit 50% of the total tax due as a condition for keeping the stay. Subsequently, the property purchased by the appellant was attached while the writ appeal was pending before the Supreme Court. The Court held that the attachment already in place adequately safeguarded the respondent’s interests and that the High Court’s deposit condition should be set aside. It directed that the attachment order would continue until disposal of the writ appeal and requested the High Court to dispose of the writ appeal on its merits in accordance with law. The appeal was disposed of with these directions. In essence, the decision balances revenue protection with the rights of a bonafide purchaser during appellate proceedings.

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellant contends that directing deposit of 50% of the total tax due during pendency of the writ appeal is unwarranted and punitive, especially since he is a bonafide purchaser who acquired the property in 2000. The attached property already protects the revenue, and the deposit condition would defeat the purchaser’s rights and undermine the stay. The High Court’s direction is not essential to the merits, and the matter should be disposed of on merits. The existence of the attachment order provides adequate revenue protection while allowing the appeal to proceed.

Contentions of Respondents

The respondent contends that the deposit acts as a prudent safeguard to secure payment of tax arrears during the pendency of litigation. The attachment already placed on the property protects the state’s revenue, and the deposit condition helps ensure compliance and prevents misuse of the stay. The court should maintain the attachment and the deposit requirement as a reasonable instrument to balance interests pending disposal of the writ appeal.

Extracted Judgment Text

Exact text extracted from official judgment records.

. A ## R. BALASUBRAMANIAM _v._ ## ADDITIONAL DEPUTY COMMERCIAL TAX OFFICER ## MARCH 9, 2007 B [DR. AR. LAKSHMANAN AND AL TAMAS KABIR, JJ.] ## _Taxation:_ ' ~- _Demand of tax arrears pursuant to purchase of property-Writ petition_ c _filed by 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. I Paras 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 SUPREME COURT REPORTS 892 (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·