Petitioner cannot claim benefit of Supreme Court interim order in entry tax case under Section 1999 Act

The HC dismissed a challenge to entry tax demand under the Orissa Entry Tax Act, 1999. The petitioner argued that an interim order from the SC dated 28th March, 2017 should benefit all assessees, not just parties to the appeal. The HC held that since no express stay order existed and the petitioner was not an applicant in pending special leave petitions, the interim order's benefit could not be extended. The court directed the petitioner to deposit the demanded amount within two months without prejudice to parties' rights, subject to the SC's final decision on whether such orders benefit all assessees.

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1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Court are:

• Whether the demand for payment of interest @ 9% from the date of filing of the return, as raised by the Department under the Orissa Entry Tax Act, 1999, is legally sustainable.
• Whether the interim order passed by the Supreme Court, restraining coercive action against certain assessees, operates in rem (applicable to all similarly situated assessees) or in personem (applicable only to the petitioners before the Supreme Court).
• Whether the petitioner, who did not file a special leave petition against the High Court's order dated 15th March 2023, can claim the benefit of the Supreme Court's interim order.
• Whether the High Court was competent to direct the levy of compensatory interest for the interregnum period between the date of filing of the return and the Supreme Court's judgment.
• The procedural propriety and legal effect of the writ petition filed by the petitioner seeking relief against the interest demand after having accepted the High Court's order.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Legality of the demand for interest @ 9% from the date of filing of the return

Relevant Legal Framework and Precedents: The demand arises under the Orissa Entry Tax Act, 1999, which empowers the Department to levy entry tax and interest on delayed payments. The Supreme Court upheld the vires of the Act and the Department's competence to impose tax on specified transactions.

Court's Interpretation and Reasoning: The Court noted that the demand for interest was challenged on multiple grounds, including the legality of imposing interest for the interregnum period. The Apex Court's decision affirmed the Department's authority to impose tax, but the question of interest for the period prior to the Supreme Court's judgment remained contentious.

Key Evidence and Findings: The Department issued a demand letter for interest @ 9% from the date of filing of the return. The petitioner had deposited 2/3rd of the demand post the Supreme Court judgment but contested the interest component for the earlier period.

Application of Law to Facts: The Court recognized the Department's statutory right to levy interest but acknowledged the ongoing litigation regarding the period for which interest is chargeable.

Treatment of Competing Arguments: The petitioner argued that interest for the interregnum period should not be charged due to the pendency of litigation and the interim order by the Supreme Court. The Department contended that the demand was valid and enforceable.

Conclusion: The Court deferred the ultimate decision on the legality of interest for the interregnum period to the Apex Court but upheld the Department's right to demand interest subject to the final outcome.

Issue 2: Nature and scope of the Supreme Court's interim order

Relevant Legal Framework and Precedents: Interim orders by the Supreme Court typically bind the parties before it (in personem) unless expressly stated to operate generally (in rem).

Court's Interpretation and Reasoning: The Court examined whether the interim order restraining coercive action against assessees who approached the Supreme Court applies to all assessees or only those petitioners. It concluded that the interim order is in personem, binding only the parties who filed the special leave petitions.

Key Evidence and Findings: The petitioner did not file a special leave petition against the High Court's order dated 15th March 2023, and therefore was not covered by the Supreme Court's interim order.

Application of Law to Facts: Since the petitioner was not a party to the Supreme Court proceedings granting interim relief, it cannot claim the benefit of such order.

Treatment of Competing Arguments: The petitioner contended that the interim order should benefit all assessees to avoid multiplicity of litigation and confusion. The Department argued that the order is limited to the petitioners before the Supreme Court.

Conclusion: The Court held that the interim order is not a general order in rem and does not extend to the petitioner who did not challenge the High Court's order before the Apex Court.

Issue 3: Competence of the High Court to direct compensatory interest for the interregnum period

Relevant Legal Framework and Precedents: The High Court's power to issue directions in writ proceedings includes the ability to grant relief as deemed just and proper, subject to appellate review.

Court's Interpretation and Reasoning: The Court acknowledged that the question of whether the High Court was competent to direct compensatory interest @ 9% for the period between filing of the return and the Supreme Court judgment is a matter reserved for the Apex Court's determination.

Key Evidence and Findings: The High Court's order dated 15th March 2023 directed payment of the remaining 2/3rd of the demand with interest from the date of the Supreme Court order and compensatory interest for the interregnum period.

Application of Law to Facts: The Court refrained from interfering with the High Court's directions pending final adjudication by the Apex Court.

Treatment of Competing Arguments: The petitioner challenged the imposition of interest for the interregnum period; the Department supported the High Court's directions.

Conclusion: The issue remains pending before the Supreme Court, and this Court declined to stay or alter the High Court's order.

Issue 4: Procedural propriety of the writ petition filed after acceptance of the High Court's order

Relevant Legal Framework and Precedents: The principle that a party cannot seek review or re-agitate issues already adjudicated in the absence of statutory or procedural provisions allowing review.

Court's Interpretation and Reasoning: The Court observed that since the petitioner had accepted the High Court's order dated 15th March 2023 without challenging it before the Apex Court, the present writ petition effectively seeks impermissible review.

Key Evidence and Findings: No special leave petition was filed by the petitioner against the High Court order; the writ petition was filed subsequently challenging the interest demand.

Application of Law to Facts: The Court treated the writ petition as an attempt to circumvent the finality of the High Court's order.

Treatment of Competing Arguments: The petitioner argued that the writ petition was necessary due to confusion over applicability of the Supreme Court's interim order; the Department contended it was a collateral attack on a binding judgment.

Conclusion: The Court held that the writ petition was not maintainable as a review and disposed of the petition accordingly.

Issue 5: Equitable relief and deposit of disputed amount

Court's Interpretation and Reasoning: To balance the rights of the parties and avoid prejudice pending final adjudication, the Court directed the petitioner to deposit the demanded amount within two months, without prejudice to the parties' rights.

Application of Law to Facts: This direction was to mitigate uncertainty and ensure that the Department's demand is not rendered nugatory, while preserving the petitioner's right to challenge the demand before the Apex Court.

Conclusion: The deposit direction was issued as an interim measure to maintain equilibrium between the parties.

3. SIGNIFICANT HOLDINGS

"Since there is no express order of stay of operation of the said order and the petitioner being not an applicant in any of the special leave petitions pending before the Supreme Court, we do not find any justification in extending the benefit of the interim order at this stage."

"Whether the High Court was within its competence to direct the compensatory interest to be levied on the assessee for the interregnum period between the date of filing of the return and the judgment of the Apex Court, is a matter to be decided by the Apex Court."

"Any deposit as demanded would sub serve the justice as the same would be subject to an outcome of the decision taken by the Apex Court provided it inure to the benefit of all the assessees whether they approached the Apex Court or not."

The Court established the principle that interim orders passed by the Supreme Court are generally in personem and do not automatically extend to non-parties.

The Court reaffirmed the finality of the High Court's order dated 15th March 2023 in the absence of challenge before the Apex Court and held that collateral attempts to review such order through writ petitions are impermissible.

The Court emphasized the importance of equitable interim relief by directing deposit of the disputed amount to balance the rights of the parties pending final adjudication.

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