2024 (1) TMI 115 - HC - Income Tax

Doctrine of constitutional priority - Certain transfers to be void u/s 281 - Supremecy of attachment passed by the Tax Recovery Officer / Income Tax Department or to the mortgage created in favour of the secured creditors Dues of the Income Tax Department precedence over the dues of the secured creditor - HELD THAT - As submitted by the learned counsel for the petitioner that the issues that arise for consideration stands covered by the decision of the Division Bench of this Court in the case of State Bank of India vs. Tax Recovery Officer-I 2022 (12) TMI 557 - MADRAS HIGH COURT which is admitted to by the learned counsel for the respondent, however submitted by Government Advocate for the 1st Respondent that the above judgment has been challenged before the Hon'ble Supreme Court. To a pointed question as to whether there is any interim order or stay, it was informed that there is no stay. In the absence of any stay of the orders of the Division Bench of this Court by the Apex Court, this Court is bound to decide the matters on the basis of the Division Bench Order which is the law governing as on date. It may be useful to extract the relevant portion of the judgment of the Hon'ble Supreme Court in the case of Union Territory of Ladakh and others v. Jammu and Kashmir National 2023 (9) TMI 1407 - SUPREME COURT wherein held as absolutely clear that the High Courts will proceed to decide matters on the basis of the law as it stands. It is not open, unless specifically directed by this Court, to await an outcome of a reference or a review petition, as the case may be. - WP disposed of.

Summary

Issues involved:
The issues involved in the judgment are the consideration of legal matters based on a Division Bench decision of the High Court, the challenge of the judgment before the Supreme Court, and the absence of any stay on the Division Bench order.

Consideration of Legal Matters Based on Division Bench Decision:
The learned counsel for the petitioner argued that the issues for consideration are covered by a decision of the Division Bench of the High Court in a specific case. The counsel for the respondent admitted to this. The High Court stated that in the absence of any stay from the Apex Court, it is obligated to decide matters based on the Division Bench order, which currently governs the law.

Challenge Before the Supreme Court:
The Government Advocate for the 1st Respondent mentioned that the judgment in question has been challenged before the Supreme Court. However, it was clarified that there is no stay on the Division Bench orders. The High Court emphasized that unless specifically directed by the Supreme Court, High Courts must proceed to decide matters based on existing laws without waiting for the outcome of a reference or review petition.

Disposition of the Writ Petition:
In light of the above considerations, the High Court disposed of the writ petition in accordance with the Division Bench order. No costs were awarded in this matter. The judgment also referred to a relevant portion of a Supreme Court judgment to emphasize the obligation of High Courts to proceed with decisions based on existing laws.