Supreme Court revises order on deposit, guarantees, and recovery procedures in recent ruling

The Supreme Court recalled its earlier order and issued a fresh one for clarification in response to an interlocutory application. The petitioner was directed to deposit Rs. 2,500 crores within three weeks and secure the remaining Rs. 8,500 crores through a bank guarantee. The Department could withdraw the initial deposit upon certain conditions, with undertakings for repayment. Coercive recovery steps were stayed, amendments in the petition were allowed, and a final disposal date was set. Another related petition was disposed of in light of the current order.

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Issues involved: Interlocutory application for correction/clarification of order dated 15th November, 2010; deposit of a sum of Rs. 2,500 crores by petitioner; securing balance amount of Rs. 8,500 crores by giving bank guarantee; undertaking by Department and petitioner regarding return/payment of deposited amount with interest; permission for Department to withdraw deposited amount; stay on coercive recovery steps by Department; allowance of amendments in writ petition and filing of comprehensive reply by Department; final disposal date set for 19th July, 2011; disposal of S.L.P. (C) No.30928 of 2010.

The Supreme Court, in response to an interlocutory application for correction/clarification of an order, decided to recall the earlier order dated 15th November, 2010, and issue a fresh order for the sake of clarification. The petitioner was directed to deposit Rs. 2,500 crores with the Registry of the Court within three weeks from the mentioned date. Additionally, the petitioner was granted liberty to deposit the amount via 'wire transfer,' with coordination between the Advocate-on-Record and the Drawing and Disbursing Officer of the Supreme Court. The remaining balance of Rs. 8,500 crores was to be secured by the petitioner through a bank guarantee from a Nationalised Bank, to be provided within eight weeks from the specified date.

In the event that the initial deposit of Rs. 2,500 crores was made within the stipulated period, the Department was permitted to withdraw the amount, subject to an Undertaking by the Director General, International Taxation, ensuring the return of the sum with interest if the petitioner ultimately succeeds. A similar Undertaking was required from the Managing Director of the petitioner, stating that if the special leave petition/civil appeal is dismissed, the balance amount would be paid with interest as determined by the Court. Both the Department and the petitioner were directed to provide these Undertakings within eight weeks from the specified date.

Furthermore, the Court ordered a stay on any coercive steps by the Department to recover the outstanding demand until further notice. The Court allowed amendments in the writ petition and the filing of a comprehensive reply by the Department within eight weeks. The petition was scheduled for final disposal on 19th July, 2011. Additionally, in relation to S.L.P. (C) No.30928 of 2010, which was filed against an order dated 22nd October, 2010, the Court noted that it would not survive in light of the order passed on the current matter and accordingly disposed of the same.

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