2025 (2) TMI 873 - HC - Income Tax

Claim of Unconditional stay on the proclamation and sale of the immovable property of which the Petitioner is the joint owner - HELD THAT - The conduct of the Petitioner is important. The fact that the Petitioner or the Company are unwilling to pay any taxes though the tax demands have attained finality is also relevant. The fact that none of the foundational orders are challenged is important. The fact that no severe financial hardships are pleaded or urged is also important. In the case of Dunlop India Ltd and Others 1984 (11) TMI 63 - SUPREME COURT (LB) has held that in fiscal matters there is no justification for granting unconditional interim reliefs merely upon the Petitioner making out a prima facie case. The aspects of balance of convenience must also be considered. Here assuming that a prima facie arguable case is made out still the balance of convenience does not favour grant of an unconditional stay. We are satisfied that the ad interim orders granted earlier can be confirmed if the Petitioner deposits 50% of the demanded amount with the Respondents within eight weeks of today. If no such deposit is made within eight weeks of today this interim order will stand vacated without further reference to this Court. We order accordingly. We clarify that this interim order only restrains the Respondents from selling the attached property. Based on this interim relief the Petitioner must not deal with the attached property or otherwise sell transfer convey or create any third-party rights in it.

Summary

The Bombay High Court heard arguments from both parties and determined that no unconditional stay should be granted on the proclamation and sale of the immovable property jointly owned by the Petitioner. The Petitioner did not challenge previous orders holding her liable with a company for tax demands, nor did she challenge the attachment order leading to the impugned proclamation. The Court noted the Petitioner's reluctance to settle tax demands despite their finality and emphasized the importance of not challenging foundational orders. Citing precedent, the Court held that in fiscal matters, interim relief should not be granted solely based on a prima facie case, and the balance of convenience must be considered. Consequently, the Court confirmed an interim order requiring the Petitioner to deposit 50% of the demanded amount within eight weeks to prevent the sale of the attached property. The interim order restrains the Respondents from selling the property, and the Petitioner is directed to maintain the status quo regarding the property.