1982 PLP 378 (PTD)

(For suspension of the operation of the judgment dated 29‑3‑1981 of the Lahore High Court in Writ Petition No. 5039 of I.980. For vacation of stay order dated 10‑6‑1981, granted by the Supreme Court in C. M. P. No. 485 of 1981 in C. P. No. 682 of 1981). --‑‑ Art. 185(3)‑Leave to Appeal‑Stay order‑Principles on which orders in nature of interim injunction issued, viz. balance of conveni ence and irreparable loss, not applicable‑‑Case, held, not fit for issuance of interim injunction and stay order previously issued vacated. Zia Mahmood Mirza, Advocate Supreme Court and S. Inayat Hussain, ORDER NASIM HASAN SHAH, J:‑This order will dispose of two Civil Miscellaneous Petitions (C. M. P. No. 485 of 1981 and C. M. P. No. 359 of 1912) aris ing out of the filing of Civil Petition for Special Leave to Appeal No. 682 of 1981. The facts leading to the filing of these two petitions are that the respondent, Syed Jamat Ali Shah filing a declaration on 31st August, 1979 under section 3‑C, which was added to the Income‑tax Act, 1922, of undisclosed income of Rs. 1,05,00,

000. Part of the undisclosed income (Rs, 19,74,219) was declared in the shape, of‑ shares M/s. Universal Oil and Vegetable Ghee Mills Ltd., which asset was, subsequently, acquired by the Federal Government and, according to the assessee, no compensation has been paid in lieu thereof. The Income‑tax Department, however, proceeded to assess tax exactly on the basis of the income originally declared and required the assessee to pay 30% of it as tax, vide its order dated 25‑6‑1977. The assessee, however, objected to the tax being levied on the entire amount on the ground that as shares worth Rs. 19,74,219 had been taken over without compensation, to petitioners were not entitled to obtain 30% of the above amount by way of tax. As this plea was not accepted, the assessee (respondent herein) filed a writ petition (W. P. No. 5039/80) in the Lahore High Court for vindication of this plea. A learned Single Judge of the said High Court accepted the writ petition vide its order dated 29‑3‑1981 observing that "the situation, as it stands, the Federal Government has taken away the entire 100%. It is, thus, neither legal nor fair and proper to assess the petitioner (respondent herein) of this amount", He, therefore, allowed the petition to the extent of the value of the shares taken over without payment of com pensation and the impugned order of the Income‑tax Authority dated 25‑6‑1977 was declared to be without lawful authority to the extent that it assessed the tax on the sum of Rs. 19,74,

219. The framing of a fresh assessment order excluding this amount was, accordingly ordered. Aggrieved by this order of the High Court, the petitioners herein have filed it this Court a Petition for Leave to Appeal (C. P. S. L. A. No. 682/81). Along therewith a miscellaneous application (C. M. P. No. 485/81) was also filed for suspension of the order of the High Court till the disposal of the case. The above miscellaneous application was placed before one of us (Aslam Riaz Hussain, J.) on 10‑6‑1981 and the following order was passed thereon :‑ "Heard. Notice to the respondent for an actual date. In the meanwhile, the operation of the impugned judgment sus pended." It appears that the notice ordered to be issued to the respondent in this application, was not issued nor 4ny date fixed for the hearing of this matter. However, the respondent has now himself filed an application for vacation of the order dated 10‑6‑1981 (C. M. P. No. 359/82). The filing of this application indicates that the respondent has notice of the application (C. M. P. No. 485/81) and desires the vacation of the ex parte order passed at the preliminary hearing. Since both the parties are present, the appli cation relating to the stay matter, can, therefore, be heard and disposed of today. The principles, on which orders in the nature of interim injunction are issued, are well established, namely, party seeking it must have prima facie case, that the said party will suffer irreparable loss if the interim relief prayed for is not granted and on which, side lies the balance of convenience or inconvenience if the stay is or is not allowed. It is not necessary at this stage to discuss whether the petitioners have a prima facie case, as this matter will be considered when the petition for leave to appeal comes up for consideration. However, it is clear to us that the petitioners will not suffer irreparable loss if the tax! on the value of the shares of the taken‑over Company, namely, Universal Oil and Vegetable Ghee Mills Ltd. is not realised pending the decision of the question of the correctness or otherwise of the impugned judgment of the High Court, and as for the question of the balance of con venience, respondent will suffer far more grievously if the amount is realised and the appeal fails, than the. petitioners if the realisation is left over until the decision of the appeal. Consequently this is not a fit case for issuance of an order of interim stay. The order dated 10‑6‑1981, is, accordingly, vacated. Stay order vacated.