Interim protection against tax recovery on molasses followed binding precedent pending final decision in the connected appeal.

Where an earlier Division Bench ruling had held that trade tax on purchase of molasses could not be realised, the Court followed that operative precedent and granted interim protection against tax recovery during the pendency of the connected appeal. The Court noted that the Supreme Court had only stayed refund and had not stayed the precedent on merits, so the respondents were restrained from realising tax for the time being. At the same time, the respondents were directed to maintain accounts of molasses purchased and sold, preserving the basis for future enforcement if the State ultimately succeeded.

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Issues: Whether, in view of the earlier Division Bench decision and the interim order of the Supreme Court, the respondents could realise tax on molasses and whether the petitioner was entitled to protection against such realisation during the pendency of the appeal.

Analysis: The dispute was treated as covered by the earlier Division Bench decision holding that trade tax on purchase of molasses could not be realised. The Court noted that the Supreme Court had not stayed that decision on merits, but had passed an interim order staying refund. Proceeding on that basis, the Court directed that tax should not be realised during the pendency of the appeal, while requiring the respondents to maintain accounts of the molasses purchased and sold so that liability could be enforced if the Supreme Court ultimately upheld the State's case. The order was made subject to the final outcome of the pending appeal.

Conclusion: The respondents were restrained from realising tax on molasses during the pendency of the appeal, and the petitioner obtained interim protection in its favour.

Final Conclusion: The writ petition was disposed of in terms of the earlier binding precedent, with interim protection continued until the Supreme Court finally decided the connected appeal.

Ratio Decidendi: Where an earlier Division Bench decision on the taxability of molasses is operative and has not been stayed on merits, the Court may follow that precedent and restrain tax realisation pending the final outcome of the connected Supreme Court appeal, while preserving accounts for future enforcement if required.

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