2017 (3) TMI 945 - SC - Income Tax

Stay of demand - Validity of interim order passed by the HC to re-deposit the amounts received by them from APBCL on the sale of the stocks (Beer, Foreign Liquor and Indian Made Foreign Liquor) attached by the Income-tax Department. - Held that - it is not necessary for this court, at this stage, to go into the various disputed contentions raised by the parties on the merits since the writ petitions are pending before the High Court. We find that the deposit is to be made mainly by the State of Andhra Pradesh. - Decided against the petitioners.

Summary

Issues:
Interim order passed by the High Court of Judicature at Andhra Pradesh, Liability of tax amounting to ?489.07 crores, Disputed contentions raised by the parties, Deposit to be made mainly by the State of Andhra Pradesh, Disposal of appeals with a request to expedite the writ petitions, Direction to deposit amounts as ordered by the High Court, Clarification on leaving all contentions open, Stay on recovery of dues till disposal of writ petitions.

Interim Order by High Court:
The appellants appealed against the interim order passed by the High Court of Judicature at Andhra Pradesh, dated December 16, 2015, in WVMP Nos. 1688 and 2546 of 2015. The order directed the petitioners and the Government of Andhra Pradesh to re-deposit the amounts received from APBCL on the sale of attached stocks to ensure the entire sale proceeds remain in a separate account. The court emphasized securing the interests of all parties until the final decision on the writ petitions.

Liability of Tax Amount:
The Supreme Court, in its order dated February 1, 2016, stayed coercive steps regarding the liability of tax amounting to ?489.07 crores until the next hearing. The court acknowledged the submissions of both parties but refrained from delving into the disputed contentions on merits, as the writ petitions were pending before the High Court.

Deposit Responsibility and Disposal of Appeals:
After hearing the counsels for both parties, the Supreme Court concluded that the deposit responsibility primarily lies with the State of Andhra Pradesh. The court disposed of the appeals with a request to the High Court to expedite the writ petitions, preferably before the upcoming summer vacation.

Direction on Deposit and Recovery:
In case the writ petitions are dismissed, the appellants were directed to deposit the amounts as per the High Court's orders within one month, along with applicable interest. The Supreme Court clarified that all contentions remain open, and the writ petitions should be decided independently of any observations in the interim order. Additionally, there should be no recovery of dues as per the impugned order until the writ petitions are finally disposed of by the High Court.