Pre-Condition to deposit 20% of the disputed tax for stay of recovery proceedings can be relaxed in appropriate cases: Delhi High Court
Delhi High Court in the case of Tata Teleservices Ltd. V. CIT, International Taxation’ has held that in case of the Disputed tax demand, Pre-Condition to deposit 20% of the disputed tax for stay of recovery proceedings, can be relaxed in appropriate cases”
In this case, one of the factors taken into consideration is that the Department has not considered, inter alia, the factor of “Balance of convenience” in respective assessee’s case.
The theory of “Balance of convenience” could be very much relevant in all such cases. The meaning of “balance of convenience” in favour of the plaintiff is that if an injunction is not granted and the suit is ultimately decided in favour of the defendants that could cause the irrepairable harm to plaintiff.
It is where there is doubt as to the adequacy of the respective remedies in damages available to either party or to both, that the question of balance of convenience arises.
The court should issue an injunction where the balance of convenience is in favour of the plaintiff and not where the balance is in favour of the opposite party. Although it is called “balance of convenience”, it is really the “balance of inconvenience”, and it is for the plaintiffs to show that the inconvenience caused to them would be granted than that which may be caused to the defendants.
Should the inconvenience be equal, it is the plaintiffs who suffer. In other words, the plaintiffs have to show that the comparative mischief from the inconvenience which is likely to arise from withholding the injunction will be greater than which is likely to arise from granting it.
In granting a temporary injunction the Court normally has to consider the following factors:
The plaintiff makes out a prima facie case;
That the plaintiff will suffer irrepairable loss if the injunction prayed for is not granted;
The balance of convenience lies in favour of the plaintiff.