2003 (5) TMI 530 - SC - Indian Laws

Summary

Issues Involved:
1. Interim order by the High Court directing issuance of No Objection Certificate (NOC).
2. Payment schedule directed by the High Court.
3. Appropriation of Rs. 12.5 crores deposited by AUL towards inland air travel tax dues.
4. Legality of granting interim relief in the nature of final relief.
5. Equity of the High Court's order.
6. Joinder of causes of action in the writ petition.

Detailed Analysis:

1. Interim Order by the High Court Directing Issuance of NOC:
The Supreme Court examined the High Court's interim order directing the Union of India and other respondents to issue a No Objection Certificate (NOC) to the respondent. The Attorney General argued that this interim relief was beyond the scope of the writ petition and akin to granting final relief. The Supreme Court agreed, noting that such an interim order could not be justified without a final decision on the merits of the case. The High Court's direction to issue an NOC was thus deemed inappropriate at the interlocutory stage.

2. Payment Schedule Directed by the High Court:
The High Court had directed the respondent to pay Rs. 50 lacs per month for six months and Rs. 70 lacs per month for the next six months to the Customs Authorities. The Supreme Court found this directive problematic, as it was based on an interim arrangement without resolving the underlying dispute. The Court emphasized that interim orders should not pre-empt the final outcome of the case.

3. Appropriation of Rs. 12.5 Crores Deposited by AUL:
The respondent contended that the Rs. 12.5 crores deposited by AUL should be appropriated towards their inland air travel tax dues. However, the statutory authorities had rejected this contention, and the Supreme Court noted that the High Court should not have considered this deposit in its interim order. The Supreme Court highlighted that the High Court's recognition of a settlement between AUL and the respondent was not binding on the appellants, who were not parties to such a settlement.

4. Legality of Granting Interim Relief in the Nature of Final Relief:
The Supreme Court scrutinized whether the High Court's interim order amounted to granting final relief. It was determined that the High Court had erred in providing relief that should only be granted after a full hearing and final decision. The Court stressed that interim relief should not pre-empt the final adjudication of the issues involved.

5. Equity of the High Court's Order:
The Supreme Court assessed whether the High Court's order was equitable. The Attorney General argued that the respondent, having collected the tax from passengers, failed to deposit it with the authorities and instead used it for their own purposes. The Supreme Court agreed that granting instalments for part of the amount due could not be considered equitable, especially when the respondent had defaulted on statutory obligations.

6. Joinder of Causes of Action in the Writ Petition:
The Supreme Court questioned the propriety of combining the challenge to the tax liability with the request for an NOC to re-launch airline operations in a single writ petition. The Court noted that the authorities responsible for granting permission to re-launch airline operations were not parties to the writ petition. The Court expressed doubts about the validity of such joinder of causes of action and emphasized that the High Court should not have granted final relief at the interim stage.

Conclusion:
The Supreme Court allowed the appeal, setting aside the High Court's interim order. The NOC issued provisionally was revoked, and any payments made by the respondent would be credited or adjusted as deemed appropriate by the High Court in the pending writ petition. The Supreme Court refrained from expressing any opinion on the merits of the dispute, leaving it to the High Court to decide the issues in the pending writ petition. The appeal was thus allowed, and the High Court's interim order was overturned.