# M/s Tata Motors Limited, Deva Road, Lucknow Revisionist v. Commissioner, Commercial Tax, U.P., Lucknow

- **Citation:** (2016) 7 ILRA 300
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2016-07-11
- **Bench:** Rajan Roy
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-tata-motors-limited-deva-road-lucknow-revisionist-v-commissioner-commercial-44067
- **Pages:** 12

## Text

300 INDIAN LAW REPORTS ALLAHABAD SERIES

---------
REVISIONAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 11.07.2016

BEFORE

THE HON'BLE RAJAN ROY, J.

Trade Tax Revision No.- 65 Of 2016

M/s Tata Motors Limited, Deva Road, Lucknow ...Revisionist
Versus
Commissioner, Commercial Tax, U.P., Lucknow ...Opposite Party

Counsel for Applicant/Revisionist:
Sri Mudit Agarwal, Ms. Nidhi Agarwal

Counsel for Opposite Party/State:
C.S.C.

Trade Tax -- VAT Act, 2008 -- Sections 55 and 57 -- Interim Relief -- Stay of Tax Recovery --
Parameters -- Application of Mind -- Cryptic/Unreasoned Orders -- Trade Tax Revision under Section
58 of the VAT Act, 2008 against the order dated 11.05.2016 passed by the Commercial Tax Tribunal, Lucknow
in Appeal No. 160 of 2016 -- revisionist (Tata Motors) challenged the assessment order for the year 2012-13
involving disputed tax-liability of Rs. 32,96,62,950/- relating to stock transfer of 1749 chassis from Lucknow
Plant to body builders -- First Appellate Authority stayed 70% of the disputed amount -- on second appeal,
the Tribunal enhanced the stay to 90% -- both orders were passed without proper application of mind to the
relevant parameters laid down by the Supreme Court -- the question of law: whether the impugned judgment
of the Tribunal can be sustained in the light of the parameters laid down by the Supreme Court in Pennar
Industries Ltd., Benara Valves Ltd., and Dunlop India Ltd. for considering interim relief matters -- Held: a bare
perusal of both the interim orders shows complete disregard and non-application of mind to the parameters
laid down by the Supreme Court and this Court -- merely observing that 'after considering the facts in totality'
a certain percentage of tax shall remain stayed, without addressing the relevant parameters, does not satisfy
the requirement of law -- passing of such cryptic orders is hereby deprecated -- the First Appellate Authority
and the Tribunal are reminded that they have a constitutional and statutory obligation to follow the principles
of law enunciated by the Supreme Court. (Paras 1-5)

Trade Tax -- Interim Relief -- Parameters to be Considered -- Prima Facie Case -- Balance of
Convenience -- Irreparable Injury -- Public Interest -- Stay of Tax Liability -- Held: the principles
governing grant of interim relief in tax matters are settled by the Supreme Court in a catena of decisions --
the following parameters must be addressed while deciding an application for stay of disputed tax liability: (i)
prima facie case -- which must be a substantial question raised bona fide requiring investigation and a
decision on merits -- mere establishment of a prima facie case is not sufficient; (ii) balance of convenience --
the court/tribunal must consider and compare the probable injury to either side; (iii) irreparable injury -- the
injury must be a material one that cannot be adequately compensated in damages; (iv) public interest -- the
public interest must not be jeopardized and institutional embarrassment must be avoided; (v) financial
condition/hardship of the assessee -- relevant material showing dire financial condition such as Income Tax
Returns must be placed on record -- in cases of indirect taxation where the burden has been passed on to the
7 All. M/s Tata Motors Limited, Deva Road, Lucknow Vs Commissioner, Commercial Tax,
 U.P., Lucknow

301
 consumer, any interim relief to the manufacturer/dealer should be granted only in exceptional circumstances
-- the order must disclose due and proper application of mind to the factual scenario keeping in view all the
above factors. (Paras 6-14)

Trade Tax -- Section 55(6) and Section 57(9) of VAT Act, 2008 -- Pre-deposit -- Stay Order
Limited to 30 Days Unless Security Furnished -- Powers of Appellate Authority and Tribunal --
Held: under Section 55(6) of the VAT Act, 2008 the First Appellate Authority has the power to stay the
realization of disputed tax, fee or penalty till disposal of appeal, subject to the condition that no stay shall
remain in force after 30 days unless the appellant furnishes security to the satisfaction of the Assessing
Authority -- under Section 57(9) of the VAT Act, 2008 the Tribunal has similar power to stay the operation of
the order appealed against, subject to the condition that the appellant must make a pre-deposit of not less
than one-third of the disputed amount in addition to the amount required to be deposited under Section 55(3)
-- sub-section 10 of Section 57 further stipulates that no stay of recovery shall remain in force for more than
30 days unless adequate security is furnished -- these mandatory conditions must be complied with and the
Tribunal/Appellate Authority must ensure compliance before granting or continuing a stay order. (Paras 3-4)

Trade Tax Revision Allowed in Part -- Matter Remanded to First Appellate Authority -- Interim
Protection for 30 Days -- Impugned orders passed by the First Appellate Authority dated 11.05.2016 and
by the learned Commercial Tax Tribunal dated 11.05.2016 in Appeal No. 160 of 2016 (year 2012-13) set aside
-- Trade Tax Revision No. 65 of 2016 allowed in part -- matter remanded to the First Appellate Authority for
considering the application for interim relief afresh keeping in mind the observations made hereinabove, and a
decision thereon within a period of 30 days from the date of receipt of a certified copy of the order -- the First
Appellate Authority shall also be at liberty to decide the appeal itself on merits within the aforesaid period --
no coercive action shall be taken against the revisionist for 30 days or till disposal of the interim relief
application (Para 15)

Case Law Discussed:
1. Pennar Industries Ltd. v. State of Andhra Pradesh and others, (2009) 3 SCC 177
2. Ravi Gupta v. Commissioner of Sales Tax, Delhi and another, (2009) 5 SCC 208
3. Mool Chand Yadav and another v. Raz Buyland Sugar Company Ltd., Rampur and others, (1982) 3 SCC 484
4. Benara Valves Ltd. and others v. Commissioner of Central Excise and another, (2006) 13 SCC 347
5. Kishorsinh Ratansinh Jadeja v. Maruti Corporation and others, (2009) 11 SCC 229
6. Mahadeo Savlaram Shelke and others v. Pune Municipal Corporation and another, (1995) 3 SCC 33
7. Shiv Kumar Chadha v. Municipal Corporation of Delhi, (1993) 3 SCC 161
8. Dalpat Kumar v. Prahlad Singh, (1992) 1 SCC 719
9. Assistant Collector of Central Excise v. Dunlop India Ltd. and others, (1985) 1 SCC 260
10. Sri Samarias Trading Company Pvt. Ltd. v. S. Samuel and others, (1985) 2 SCR 24
11. Titagarh Paper Mills Co. Ltd. v. State of Orissa, (1983) 2 SCC 433
12. Union of India v. Oswal Woolen Mills Ltd., (1984) 2 SCC 646
13. Siliguri Municipality v. Amlendu Das, (1981) 2 SCC 436
14. I.T.C. Ltd. v. Commissioner (Appeals) Custom & Central Excise, 2005 (184) E.L.T. 347 (Allahabad, D.B.)
15. Kribhco Shyam Fertilizers Ltd. v. Commissioner of Commercial Taxes, (2009) UPTC 626
16. M/s Honda Siel Cars India Ltd. v. The Commissioner, Commercial Taxes, U.P., Lucknow, (2010) UPTC
1152
17. Suresh Chandra Agarwal and sons, Muzaffarnagar v. The Commissioner Commercial Taxes, U.P. Lucknow,
(2010) UPTC 1158
18. M/s Simla Gomti Pan Products v. Commissioner of Commercial Tax, U.P., Lucknow, 2015 SCC Online Alld.
5081
19. M/s Otis Elevators Company (India) Ltd. v. The Commissioner of Commercial Taxes, U.P. Lucknow, 2014
SCC Online Alld. 13691
302 INDIAN LAW REPORTS ALLAHABAD SERIES

20. M/s Tata Coffee Ltd. v. Commissioner of Trade Tax and another, 2002 UPTC 156
21. Writ Petition No. 2648 of 2012 (M/S), M/s A.P. Enterprises v. Commissioner of Commercial Tax, U.P. and
others
22. Agraj Ispat Private Ltd. Abupura v. Commissioner, Commercial Taxes, U.P. Lucknow

(Delivered by Hon'ble Rajan Roy, J.)

1. Trade Tax Revision No. 65 of 2016 has been filed under Section 58 of the VAT Act,
2008 against the judgment and order dated 11.05.2016 passed by the learned Commercial Tax
Tribunal, Lucknow in Appeal No. 160 of 2016.

2. The question of law involved in this revision is as under:-

Whether the impugned judgment of the tribunal can be sustained in the light of the
parameteters laid down by the Supreme Court in a catena of decisions viz. (2009) 3 SCC 177;
Pennar Industries Ltd. vs. State of Andhra Pradesh and others; (2006) 13 SCC 347; Benara Valves
Ltd. And others vs. commissioner of Central Excise and Another; (1985) 1 SCC 260; Assistant
Collelctor v. Dunlop India Ltd. & ors., etc. for considering interim relief matters ?

3. The contention of the revisionist in nut shell is that both the first appellate authority and
the learned Tribunal have failed to apply their mind to the relevant parameters while considering
the application for interim relief and have declined a complete stay on the disputed tax-liability
mechanically. Learned counsel for the revisionist relied upon the following judicial
pronouncements in support of his contention:-

(1) Pennal Industries Ltd. vs. State of Andhra Pradesh and others; (2009) 3 SCC
177

(2) Ravi Gupta vs. commissioner of Sales Tax, Delhi and another; (2009) 5 SCC
208

(3) Mool Chand Yadav and another vs Raz Buyland Sugar Company Ltd., Rampur
and others; (1982) 3 SCC 484

(4) Benara Valves Ltd. And others vs. Commissioner of Central Excise and
another; (2006) 13 SCC 347

(5) Kishorsinh Ratansinh Jadeja vs. Maruti Corporation and others; (2009) 11
SCC 229

(6) Mahadeo Savlaram Shelke and others vs Pune Municipal Corporation and
another; (1995) 3 SCC 33
7 All. M/s Tata Motors Limited, Deva Road, Lucknow Vs Commissioner, Commercial Tax,
 U.P., Lucknow

303

(7) Kribhco Shyam Fertilizers Ltd. Vs. Commissioner of Commercial Taxes;
(2009) UPTC 626

(8) M/s Honda Siel, Cards India Ltd. vs. the Commissioner, Commercial Taxes,
U.P., Lucknow; (2010) UPTC 1152

(9) Agraj Ispat Private Ltd. Abupura vs Commissioner, Commercial Taxes, U.P.
Lucknow.

(10) Suresh Chandra Agarwal and sons, Muzaffarnagar vs The Commissioner
Commercial Taxes, U.P. Lucknow; (2010) UPTC 1158

(11) M/s Simla Gomti Pan Products vs Commissioner of commercial Tax, U.P.,
Lucknow; 2015 SCC Online Alld. 5081

(12) M/s Otis Elevators Company (India) Ltd. Vs The Commissioner of
Commercial Taxes, U.P. Lucknow; 2014 SCC Online Alld. 13691

(13) M/s Tata coffee Ltd. Vs Commissioner of Trade Tax and another; 2002
UPTC 156

(14) Writ Petition No. 2648 of 2012 (MS) M/s A.P. Enterprises vs Commissioner of
Commercial Tax, U.P. and others.

4. Sri Sanjeev Shankhyadhar learned counsel appearing on behalf of the Tax-department
relied upon the decision of the Supreme Court in the case of Assistant Collelctor v. Dunlop India
Ltd. & ors reported in (1985) 1 SCC 260 and asserted that the said pronouncement has not been
adhered to.

5. The parameters which are required to be considered while deciding an application for
interim relief, have been settled by the Supreme Court in a catena of decisions, yet this Court finds
from the revisions which are filed before it including this revision that not only the first appellate
authority but the learned Tribunal pass un-reasoned orders which do not disclose due and proper
application of mind to the relevant parameters, ignoring the pronouncement of the Supreme Court
and also those of this Court on the subject. It is indeed a deplorable state of affairs and it is high
time that the learned Tribunal and the Appellate Authorities under various taxing statutes woke up
to the constitutional and statutory obligations imposed upon them to follow the principles of law
enunciated by the Supreme Court and by this Court while considering an application for stay of
disputed tax liability.

6. Under VAT Tax Act, 2008 an appeal is provided against an order passed by the
Assessing Authority which is referred to as the First Appellate Authority. Under sub section 3 of
Section 55 of the VAT Act, 2008 there is a requirement of pre-deposit of the amount admitted by
304 INDIAN LAW REPORTS ALLAHABAD SERIES

the appellant in the tax returns filed by him or at any stage in any proceedings under this Act. In
addition to aforesaid in sub section 6 of Section 55 of the VAT Act, 2008 the Appellate Authority
has been vested with the power of staying the realization of disputed amount of tax, fee or penalty
payable by the appellant till the disposal of the appeal, provided that-(i) where an order under
appeal involves dispute about tax, fee or penalty, no stay order shall remain in force after thirty
days from the date on which the same has been granted, if the appellant does not furnish security to
the satisfaction of the assessing authority for payment of the amount, the realization whereof has
been stayed within the aforesaid period of thirty days; (ii) no such application shall be entertained
unless it is filed along with the memorandum of appeal under sub-section (1).

7. Against the order of the First Appellate Authority there is a provision for filing an appeal
before the learned Tribunal under Section 57(4) of the VAT Tax Act, 2008. Under sub section 9
thereof the Tribunal is empowered to stay the operation of the order appealed against or the
recovery of the disputed amount of any tax, fee or penalty payable, or refund of the amount due, or
proceeding for re-assessment under the order appealed against till the disposal of the appeal on the
application of the appellant moved along with memorandum of such appeal after giving the parties
a reasonable opportunity of being heard subject to the conditions mentioned in the provisos to the
said Section. There is also a requirement under proviso (a) of sub section 9 of Section 57 of predeposit of not less than one third of such disputed amount in addition to the amount required to be
deposited under sub-section 3 of Section 55. Sub-section 10 thereof further stipulates that no such
stay order which relates to stay of recovery of any tax, fee or penalty by the learned Tribunal shall
remain in force for more than thirty days unless the appellant furnishes adequate security to the
satisfaction of the assessing authority concerned for the payment of the outstanding amount.

8. Against the assessment order for the year 2012-13 a First Appeal was filed by the
revisionist under Section 55 of the VAT Act, 2008. The First Appellate Authority vide its order
dated 11.05.2015 stayed the realization of 70% of the disputed amount being Rs.32,96,62,950/-
with the condition that the businessman shall furnish security in respect of the stayed amount
within thirty days to the satisfaction of the assessing authority. The said order reads as under:-

" यह स्थगन प्रार्थना पत्र श्री महेंद्र विक्रम व िंह ज्वा0 कवम0 (कारपो0 ेल) वितीय, िाविज्य कर, लखनऊ िारा उ०
प्र0 िैट अविवनयम की ९(२) के अिंतगथत वि० २८.०३.२०१६ को पाररत कर वनिाथरण के विरुद्ध िाखखल अपील के ार् प्रस्तुत वकया गया
है वि मे वििावित िनरावि रु० ३२,९६,६२,९५०.०० है1

स्थगन प्रार्थना पत्र पर ुनिाई हेतु अपीलकताथ की ओर े श्री िी0 एल० िोिी, अवििक्ता/ राकेि गुप्ता अविकृत
प्रवतवनवि उपखस्थत हुए बताया वक १७४९ चेव को लखनऊ प्ािंट े बॉिी वबल्डर के यहााँ िाब्वॉकथ के वलए स्टॉक ट्ािं फर घोवित
वकया एििं १२ फामथ ऍफ़ भी िाखखल वकये गए है1 यह वबिंिु ििथ २००९-१०, २०१०-११ में वििावित र्ा. तर्ा इ वबिंिु पर िाि को प्रर्म
अपीलीय आिेि िारा प्रवतप्रेवित वकया गया है. िनरावि रु० १०.३५ करोड़ फामथ-ऍफ़ एििं फामथ- ी िमा करने के वलए मय वक मािंग
वक गई र्ी1 मस्त वििावित िेय कर को अपील वनस्तारण तक स्थवगत रखने के वलए अनुरोि वकया गया1

विभाग की ओर े विप्टी कवमश्नर, खण्ड - १४ िाविज्य कर, लखनऊ उपखस्थत हुए और स्थगन का प्रबल विरोि
वकया.1
7 All. M/s Tata Motors Limited, Deva Road, Lucknow Vs Commissioner, Commercial Tax,
 U.P., Lucknow

305

अतः मस्त तथ्ोिं पर विचारोपरािंत वििावित िेयकर रु0 ३२,९६,६२,९५०.०० (बतीि करोड़ विन्निेय लाख बह ठ
हज़ार नौ ौ पचा मात्र) का ७०% ( त्तर प्रवतित) अपील के वनस्तारण तक स्थवगत रखने के आिेि विए िाते हैं. व्यापारी आिेि के
३० विन के अिंिर स्थवगत िनरावि की िमानत कर वनिाथरण अविकारी के न्तोिानु र िाखखल करेंगे अन्यर्ा यह आिेि स्वतः वनरस्त
हो िायेगा. "

9. On a bare perusal of the interim order passed as aforesaid complete disregard and non
application of mind to the parameters laid down by the Supreme Court and this Court in various
decisions is writ large. Merely saying that "considering the facts in totality 70% of the disputed tax
liability shall remain stayed" does not by any cannon of judicial discipline satisfy the requirement
of adherence to the principles laid down by the Supreme Court and this Court on the subject.

10. When this order was challenged before the learned Tribunal it enhanced the interim
protection to 90% of the disputed tax liability, however, again without any application of mind to
the relevant factors, thereby, committing the same mistake which was committed by the First
Appellate Authority. For convenience the order of the learned Tribunal passed on the same day i.e.
11.05.2016 is reproduced as under:-

"निर्णय

प्रश्नगत वितीय अपील अपीलकताथ व्यापारी िारा प्रर्म अपील ०-२७८ ििथ १२-१३ के वलए एवििनल कवमश्नर ग्रेि-
२, (अपील) -४, िाविज्य कर, लखनऊ िारा पाररत प्रश्नगत ि ूली स्थगन आिेि विनािंक ११.०५.२०१६ के विरुद्ध योवित क़ी गई है
वि में उनके िारा वििावित िनरावि रु0 ३२,९६,६२,९५०/- के ७० प्रवतित अिंि क़ी ि ूली प्रर्म अपील के वनणथय तक स्थवगत क़ी गई
है 1

अपील क़ी ुनिाई के मय अपीलकताथ क़ी ओर े उनके वििान अवििक्ता उपखस्थत होकर बताया वक १७४९
चेव को लखनऊ प्ािंट े चेव पर बॉिी फेविकेिन करने के वलए बॉिी वबल्डर के पा स्टॉक ट्ािं फर वकया गया एििं वि के
 म्बन्ध में १२ फामथ - ऍफ़ भी िाखखल वकये गए है1 िनरावि रु0 १०.३५ करोड़ के फामथ एििं फामथ ी िमा करने के वलए कर वनिाथरण
अविकारी े मय वक भी मािंग की गई1 मस्त वििावित कर को अपील वनस्तारण तक स्थवगत रखने के वलए अनुरोि वकया गया1

राज्य का पक्ष प्रस्तुत करने के हेतु अव स्टेंट कवमश्नर एििं राज्य प्रवतवनवि उपखस्थत हुए. अपीलकताथ िारा प्रस्तुत
अपील का उनके िारा प्रवतिाि वकया गया1 यह कहा गया है वक प्रर्म अपीलीय अविकारी िारा वकये गए स्थगन में हस्तिेप िािंवित
नहीिं है1

मेरे िारा उभय पक्षोिं को ुना गया एििं पाररत कर वनिाथरण आिेि, प्रर्म अपीलीय अविकारी िारा पाररत स्थगन
आिेि, वितीय अपील आिार, िाखखल स्थगन प्रार्थना पत्र एििं िपर् पत्र और अपील वक ुनिाई के मय वििान अवििक्ता तर्ा राज्य
प्रवतवनवि िारा प्रस्तुत तकों का पररिीलन वकया गया1 प्रर्म अपील स्तर पर वििावित वबिंिु का वनस्तारण प्रर्म अपीलीय अविकारी
िारा वकया िाना है, अतः िाि के गुण िोि के म्बन्ध में अविकरण स्तर े कोई वटपणी वकया िाना िािंवित/उवचत नहीिं है1 अपीलकताथ
वििावित कर को अिा कर कने में अ मर्थ है. अतः मस्त पररखस्थवतयोिं एििं तथ्ोिं पर म्यक रूप े विचार करने के उपरािंत मैं यह
उवचत मझता हाँ वक प्रर्म अपील के लिंबन काल तक म्पूणथ वििावित िनरावि रु0 ३२,९६,६२,९५०/- (रु. बत्ती करोड़ विन्निेय
लाख बह ठ हज़ार नौ ौ पचा मात्र) के ९०(नब्बे) प्रवतित अिंि की ि ूली का स्थगन अपीलकताथ िारा कर वनिाथरण अविकारी के
 मक्ष मुवचत प्रवतभूवत प्रस्तुत करने पर, प्रर्म अपील के वनस्तारण तक वकया िाना न्याय ािंगत है1

फलतः प्रश्नगत वितीय अपील आिंविक रूप में स्वीकार वकये िाने योग्य है1
306 INDIAN LAW REPORTS ALLAHABAD SERIES

आदेश

अपीलकताथ व्यापारी िारा प्रस्तुत प्रश्नगत वितीय अपील . १६०/१६, ििथ १२-१३ आिंविक रूप में स्वीकार की िाती
है तर्ा वििावित रावि के रु0 ३२,९६,६२,९५०/- के ९० (नब्बे) प्रवतित अिंि की ि ूली प्रर्म अपील के वनस्तारण तक इ प्रवतबन्ध के
 ार् स्थवगत की िाती है1 वक स्थवगत िनरावि वक िमानत अपीलकताथ म्बिंवित कर वनिाथरण अविकारी के न्तोिानु र उनके मक्ष
वनयमानु ार िाखखल करें अन्यर्ा स्थगन आिेि स्वतः वनष्प्रभािी हो िायेगा1 "

11. A bare perusal of the order passed by the learned Tribunal shows that it has merely
made a cryptic observation that it has heard the parties and perused the impugned interim order
passed by the First Appellate Authority, grounds of the second appeal, the application for interim
relief and the affidavit in support thereof, thereafter it has stated that the merits of the First Appeal
are to be decided by the First Appellate Authority, therefore, it would not be appropriate for it to
comment on the merits of the case and after mechanical reference to two decisions one of the high
Court and other of Supreme Court in Pennar Industries Ltd (supra) and mechanically stating that
after considering the totality of the facts and circumstances it finds it appropriate and justified to
stay the realization of the disputed tax-liability to the extent of 90%, and merely on the basis of this
cryptic recital it has passed the order accepting the appeal partly, thereby impliedly setting aside the
impugned order passed by the First Appellate Authority.

12. Such cryptic recitals both by the First Appellate Authority and the learned Tribunal do
not satisfy the requirement of law. The passing of such orders in such a manner are hereby
deprecated.

13. For the convenience of the learned Tribunal and the First Appellate Authority the legal
position in this regard is being reiterated in the solemn hope that in future they shall adhere to the
same strictly.

14. The principles which are to be kept in mind while considering the application for
interim relief/temporary injunction have been settled by the Supreme Court in various decisions.
Reference may be made in this regard to the judgment of the Supreme Court in the case of Shiv
Kumar Chadha v. Municipal Corporation of Delhi reported in (1993) 3 SCC 161. This was a
judgment rendered by a Bench of three Hon'ble Judges, wherein, in paragraph 30 their Lordships
observed as under:-

".....[A] party is not entitled to an order of injunction as a matter of right or course.
Grant of injunction is within the discretion of the court and such discretion is to be exercised in
favour of the plaintiff only if it is proved to the satisfaction of the court that unless the defendant is
restrained by an order of injunction, an irreparable loss or damage will be caused to the plaintiff
during the pendency of the suit. The purpose of temporary injunction is, thus, to maintain the status
quo. The court grants such relief according to the legal principles--ex debito justitiae. Before any
such order is passed the court must be satisfied that a strong prima facie case has been made out
by the plaintiff including on the question of maintainability of the suit and the balance of
convenience is in his favour and refusal of injunction would cause irreparable injury to him."
7 All. M/s Tata Motors Limited, Deva Road, Lucknow Vs Commissioner, Commercial Tax,
 U.P., Lucknow

307

15. In the case of Dalpat Kumar v. Prahlad Singh reported in (1992) 1 SCC 719, a Bench
of two Hon'ble Judges observed in paragraph 6 as under:-

"...... "prima facie case", "balance of convenience" and "irreparable loss" are not
rhetoric phrases for incantation, but words of width and elasticity, to meet myriad situations
presented by men's ingenuity in given facts and circumstances, but always is hedged with sound
exercise of judicial discretion to meet the ends of justice.

"......the court would be circumspect before granting the injunction and look to the
conduct of the party, the probable injury to either party and whether the plaintiff could be
adequately compensated if junction is refused."

16. The aforesaid decisions were considered and followed by the Supreme Court in a
subsequent decision in the case of Mahadeo Savlaram Shelke and others vs. Pune Municipal
Corporation and another, reported in (1995) 3 SCC 33, wherein it observed that in Dalpat Kumar
(supra) the Supreme Court held that the phrases "prima facie case", "balance of convenience" and
"irreparable loss" are not rhetoric phrases for incantation but words of width and elasticity intended
to meet myriad situation presented by men's ingenuity in given facts and circumstances and should
always be hedged with sound exercise of judicial discretion to meet the ends of justice. The Court
would be circumspect before granting the injunction and look to the conduct of the party the
probable injury to either party and whether the plaintiff could be adequately compensated if
injunction is refused. The Court also opined that "prima facie case" is a substantial question raised
bona fide, which needs investigation and a decision on merits i.e. a triable issue. Satisfaction that
there is a 'prima facie' case by itself is not sufficient to grant injunction. The concept of "irreparable
injury" was considered in Dalpat Kumar (supra) the Supreme Court opined that it does not mean
that there must be no physical possibility of repairing the injury but means only that the injury must
be a material one, namely one that cannot be adequately compensated by way of damages. While
considering the concept of "balance of convenience" which is required to be in favour of granting
injunction, the court opined that while granting or refusing to grant injunction, the court should
exercise sound judicial discretion and find the amount of substantial mischief or injury which is
likely to be caused to the parties, if the injunction is refused and compare it with that which is
likely to be caused to the other side if the injunction is granted. If on weighing compelling
possibilities or probabilities of likelihood of injury and if the Court considers that pending the suit,
the subject-matter should be maintained in status-quo, an injunction would be issued. Thus, it
opined that a court has to exercise its sound judicial discretion in granting or refusing the relief of
ad-interim injunction pending the suit.

17. The aforesaid observations were made in the context of refusal or grant of temporary
injunction in a suit under Order XXXIX Rule 1 and 2 of the Code of Civil Procedure, 1908 but the
principles enunciated therein have been applied to matters relating to grant or refuse to grant
interim relief in proceedings other than suits also and there is no dispute in this regard. These
308 INDIAN LAW REPORTS ALLAHABAD SERIES

observations of the Supreme Court should have been kept in mind by the Tribunal and the First
Appellate Authority while passing the impugned order.

18. A Bench of three Hon'ble Judges of the Supreme Court in the case of Assistant
Collector of Central Excise vs. Dunlop India Ltd. And others reported in (1905) 1 SCC 260, also
reiterated the aforesaid principles with reference to the earlier decisions rendered in Sri Samarias
Trading Company Pvt. Ltd. v. S. Samuel and others reported in (1985) 2 SCR 24, Titagarh
Paper Mills Co. Ltd. v. State of Orissa reported in (19983) 2 SCC 433, Union of India v. Oswal
Woolen Mills Ltd. reported in (1984) 2 SCC 646 and Siliguri Municipality vs. Amlendu Das
reported in (1981) 2 SCC 436.

19. In the case of Siliguri Municipality (supra) the Calcutta High court had passed orders
restraining the Siliguri Municipality from recovering a graduated consolidated rate on the annual
value of buildings in terms of the amended provisions of the Bengal Municipal Act, which
compelled the Supreme Court to observe that it was dismayed at the tendency of the some of the
High Courts to grant interlocutory order on mere asking. Normally the High Court should no, as a
rule, in proceedings under Article 226 grant any stay of recovery of tax save under very exceptional
circumstances.

20. In the case of Dunlop India Ltd.,(supra) the court deprecated the practice of granting
interim order which particularly gives the principal relief sought in the petition for no better reason
than that a prima facie case has been made out without being concerned about 'balance of
convenience', the 'public interest' and a host of other relevant considerations. The court further
observed that there are of-course cases which demand that interim orders should be made in the
interests of justice. Where gross violations of the law and injustices are perpetrated or are about to
be perpetrated, it is the bounden duty of the court to intervene and give appropriate interim relief.
In cases where denial of interim relief may lead to public mischief, grave irreparable private injury
or shake a citizen's faith in the impartiality of public administration, a court may well be justified in
granting interim relief against public authority. But since the law presumes that public authorities
function properly and bonafide with due regard to the public interest, a court must be circumspect
in granting interim orders of far reaching dimensions or orders causing administrative,
burdensome inconvenience or orders preventing collection of public revenue for no better reason
than that the parties have come to the court alleging prejudice, inconvenience or harm and that
a prima facie case has been shown. There can be and there are no hard and fast rules. But
prudence, discretion and circumspection are called for. There are several other vital
considerations apart from the existence of a prima facie case. There is the question of balance of
convenience. There is the question of irreparable injury. There is the question of the public interest.
There are many such factors worthy of consideration. It wondered why in the case indirect
taxation where the burden has already been passed on to the consumer, any interim relief should
at all be given to the manufacturer, dealer and the like! It also referred to its own observation in
Siliguri case(supra) that "the Court has therefore to strike a delicate balance after considering
the pros and cons of the matter lest larger public interest is not jeopardized and institutional
embarrassment is eschewed". The court further went on to observe as under:-
7 All. M/s Tata Motors Limited, Deva Road, Lucknow Vs Commissioner, Commercial Tax,
 U.P., Lucknow

309

"Even assuming that the company had established a prima facie case, about which
we do not express any opinion, we do not think that it was sufficient justification for granting the
interim orders as was done by High Court. There was no question of any balance of convenience
being in favour of the respondent-company. The balance of convenience was certainly in favour of
the Government of India. Governments are not run on mere Bank Guarantees. We notice that very
often some courts act as if furnishing a Bank Guarantee would meet the ends of justice. No
governmental business or for that matter no business of any kind can be run on mere Bank
Guarantees. Liquid cash is necessary for the running of a Government as indeed any other
enterprise. We consider that where matters of public revenue are concerned, it is of utmost
importance to realise that interim orders ought not to be granted merely because prima facie case
has been shown. More is required. The balance of convenience must be clearly in favour of the
making of an interim order and there should not be the slightest indication of a likelihood of
prejudice to the public interest".

21. In Benara Valves Ltd (supra) which was a case arising out of Central Excise Act, 1944
specially relating to Section 35-F thereof again the question was with respect to parameters to be
kept in mind while granting or refusing to grant stay of realization of disputed tax-liability. The
Supreme Court observed that in such matters though discretion is available, the same has to be
exercised judicially. After referring to earlier decision in the case of Siliguri (supra), Samarias
Trading Co.(P) Ltd. (Supra) and Dunlop India Ltd. it observed that it is true that on merely
establishing a prima facie case, interim order of protection should not be passed. But if on a cursory
glance it appears that the demand raised has no legs to stand on, it would be undesirable to require
the assessee to pay full or substantive part of the demand. Thus, the Supreme Court clarified the
matter regarding prima-facie case, thus in a given case if the issue involved has already been
adjudicated then it would be a very strong prima facie case in favour of the assessee and subjecting
the assessee to tax-liability even in such cases would fall within the ambit of the observations made
by the Supreme Court in Benara Valves Ltd (supra) as aforesaid. It is not out of place to refer a
Division Bench of this Court in the case of I.T.C. Ltd. vs. Commissioner (Appeals) Custom &
Central Excise reported in 2005 (184) E.L.T. 347 wherein a similar view has been taken.

22. In Benara Valves Ltd. (supra) the Supreme Court observed that "petitions for stay
should not be disposed of in a routine manner 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." It also observed in paragraph 9 of the judgment that "it has become an
unfortunate trend to casually dispose of stay applications by referring to decisions in Siliguri
Municipality and Dunlop India cases without analysing factual scenario involved in a particular
case.

23. In nut shell the Sumnum Bonum of the decision is due and proper application of mind
to the factual scenario involved in the case keeping in mind the principle of prima facie case,
balance of convenience, irreparable injury and other relevant factors discussed hereinabove. The
310 INDIAN LAW REPORTS ALLAHABAD SERIES

order should disclose such application of mind. Cryptic observations as have been made in the
present case, which have been noted in the earlier part of the judgment, do not satisfy these
requirements. The passing of interim order in such a manner is highly objectionable.

24. In Benara Valves Ltd. (supra) though, the Supreme Court was considering the
language used in Section 35-F of the Central Excise Act wherein the word 'undue hardship to such
person' and 'safeguard the interests of the Revenue' had been used but the observations made by it
regarding 'undue hardship' should be kept in mind in other tax matters also. It opined that in Indian
condition the expression 'undue hardship' is normally related to economic hardship. 'Undue
hardship' means something which is not merited by the conduct of the claimant, or is very much
disproportionate to it. 'Undue hardship' is caused when the hardship is not warranted by the
circumstances. For a hardship to be 'undue' it must be shown that the particular burden to observe
or perform the requirement is out of proportion to the nature of requirement itself, and the benefit
which the applicant would derive from compliance with it.

25. The interest of Revenue is also required to be taken into consideration.

26. Financial condition/hardship is an important consideration but then the businessmen,
dealer etc. has to place relevant material in this regard showing dire financial condition. Income-tax
Return are relevant material in this regard.

27. Thus, the discretion vested in the learned Tribunal and First Appellate Authority in
matters of interim relief under a Taxing Statute such as the one under consideration is to be
exercised judicially and it should be guided by the principles of law enunciated by precedents as
aforesaid and not in dis-regard thereof as has been done in the present case.

28. Learned counsel for the revisionist has also relied upon the judgment of the Supreme
court in the case of Mool Chand Yadav (supra). On a bare perusal of the same this Court does not
find the contention based thereon that in every case where an appeal is filed under Section 55 and is
admitted a complete stay of tax-liability should necessarily be ordered automatically, as acceptable.
The said judgment does not lay down any such principle of law of universal application even to an
appeal under a taxing statute. The decision in such case is also to be taken with judicious.

29. In view the above the impugned judgments and orders passed by the learned Tribunal
are hereby set aside. Normally this Court would have remanded the matter to the learned Tribunal
to decide the same afresh but considering the fact that the orders of First Appellate Authority which
were challenged in the Appeal before the learned Tribunal and stands merged in the orders passed
by it which are impugned herein, which have now been set aside, also suffer from the same defect,
it would be a futile exercise, accordingly, this Court remands the matters to the First Appellate
Authority for considering the applications for interim relief afresh keeping in mind the observations
made hereinabove and a decision thereon within a period of thirty days from the date of receipt of a
certified copy of the order. It shall also be open to the First Appellate Authority to decide the
appeal itself on merits within the aforesaid period. In order to facilitate the disposal of the
7 All. Pawan Agarwal Vs Bhoole Ram & Ors.
311
applications for interim relief it is provided that for a period of thirty days or till disposal of interim
relief applications, no coercive action shall be taken against the revisionist.

30. The revision is allowed in part.

31. Let a copy of this order be sent by the Senior Registrar of this Court to the Chairman,
Commercial Tax Tribunal who in turn shall circulate it amongst the members and a copy be also
sent to the Head of Trade Tax Department, Government of U.P.

32. A copy of this judgment shall also be kept on record of T.T.R. No. 56 of 2016.
----------
REVISIONAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 14.07.2026

BEFORE

THE HON'BLE ARVIND KUMAR MISHRA-I, J.

Criminal Revision Defective No.- 111 Of 2006

Pawan Agarwal ...Revisionist
Versus
Bhoole Ram & Ors. ...Opposite parties

Counsel for the Revisionist:
Pankaj Bharti

Counsel for the Opposite parties:
AGA Ram Shiromani Yadav

Instant Criminal Revision was preferred against the judgement and order dated 20.5.2005 passed by Special
Judge/Additional Sessions Judge, Muzaffar Nagar, acquitting the opposite parties nos.1 and 2, Bhoole Ram
and Dharmpal in S.T. No.429 of 2004, State Vs. Bhoole Ram and others, under Sections 147, 148, 307/149,
323/149, 325/149, 506 I.P.C., Police Station Khatauli, District Muzaffar Nagar.

The Submission and perused the record particularly certified copy of judgement, as brought on record by the
revisionist, as per the prosecution version, it is reflected that the incident occurred on 2.11.2001 at around 9
a.m. in the morning, when the first informant Pawan Agarwal was getting done some construction work on
Jamuna Bihar plot when the two accused persons Bhoole Ram and Dharmpal came on the plot and
threatened the labourers working on the plot and after this, they went back. They also threatened that they
will see him (informant) in future and after a short while around 9.30 a.m., the aforesaid two persons being
accompanied by 3-4 unknown persons arrived on the spot. Bhoole Ram was possessing tabal and Dharmpal
was possessing pistol and the others were possessing 'lathi' and 'danda'. They all started assaulting the
complainant side. In the meanwhile, Dharmpal with intention to kill fired from his pistol but the target was
somehow missed and the first informant saved himself. In the meanwhile, the first informant also fired in the
air for self defence. Devdutt Sharma and Yogendra arrived on the spot and saw the incident. The first
informant Pawan Agarwal sustained bone fracture injury. The report was lodged at the police station and