Special Correspondent

Matter pertains to a tax claim of Rs. 4 crore on a company

CHENNAI: In revenue matters, the court should not take upon itself the task of staying recovery of amounts due to the State unless a clear case of illegality is made out, the Madras High Court has cautioned.

A Division Bench of Justice P.D. Dinakaran and Justice Chitra Venkataraman made this observation when a writ appeal relating to a tax claim of Rs. 4 crore came up for further hearing.

Expressing "shock" and "surprise" at the fact that an earlier Bench had granted interim stay a year ago without even admitting the appeal, the Bench said courts were not for the haves alone. "This court has also repeatedly emphasised the inadvisability of making interim orders, which have the effect of depriving the State [the people of the State] of the revenues legitimately due to it... Otherwise, the odium of unlawfully depriving the State/the people of the monies lawfully due to it/them would lie upon the court."

Making it clear that this Division Bench would impose conditions, including payment of a specified portion of the tax claim while granting stay orders, the judges said: "In revenue cases, generally speaking, it is well nigh impossible to recover any arrears after the event. It is for this reason that the rules of all the States insist upon adequate deposits and securities beforehand... These provisions and the spirit underlying them cannot be ignored or violated." They directed the company to pay Rs. 2.5 crore, along with 50 per cent of the interest, within two weeks.

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