Pre-emptive purchase stay: sale consideration cannot be forced from the Department before final resolution of the writ dispute.

Where a stay has been granted against further action under Chapter XXC on a pre-emptive purchase order, the Department cannot be compelled to pay the sale consideration to the vendor while the writ proceedings remain pending. The Court followed the settled principle that public funds should not be disbursed before final adjudication and that alleged loss arising from the purchaser's conduct must be pursued against the purchaser in accordance with law, not through an interlocutory direction against the Department. Disputed questions on payment and breach were held unsuitable for resolution at the interim stage, and the stay was treated as continuing until final decision.

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Issues: Whether the interim stay against the order of purchase under Chapter XXC of the Income-tax Act, 1961 should be made absolute and whether the vendor could obtain a direction for payment of the sale consideration pending the writ proceedings.

Analysis: The challenged order was made under section 269UD(1) and operated with vesting consequences under section 269UE(2), but the Court applied the earlier Division Bench ruling that, where a stay order has interdicted further steps under section 269UD(1), the Income-tax Department should not be directed to pay the sale consideration during the pendency of the proceedings. The Court held that any loss allegedly caused to the vendor by the purchaser's conduct must be pursued against the purchaser in accordance with law, and that disputed questions about payment and breach could not be resolved at the interlocutory stage. The Court therefore treated the vendor's request for payment from public funds as unsustainable and followed the settled principle that public money should not be disbursed before the dispute is finally decided.

Conclusion: The interim stay was made absolute and the petition to vacate the stay was dismissed; no direction for payment of the sale consideration to the vendor was warranted pending the writ petition.

Final Conclusion: The writ petitioner succeeded in preserving the stay against the pre-emptive purchase order, while the vendor's request for immediate payment from the Department was rejected pending final adjudication.

Ratio Decidendi: When a court has stayed further action under section 269UD(1) during pendency of proceedings, the Income-tax Department cannot be compelled to pay the sale consideration under section 269UF before the dispute is finally resolved.

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