HC : Grants relief to Vedanta; 'Vagaries of litigation' irrelevant for asset transfer pre-approval u/s 281

Goa bench of Bombay HC sets aside AO’s order rejecting Vedanta’s prior permission request u/s Sec. 281(1) (applicable before effecting an asset transfer or creating a charge thereon); HC refers to Sec. 281 and opines that the section demands precision, holds that the AO cannot  generally say that “no proposed transaction or charge over any asset, though unencumbered, can be permitted because there is a possibility of another demand, or on account of the vagaries of litigation, etc.”, clarifies that the section only requires AO to ensure that the known claims of the Revenue are sufficiently secured; HC further observes that "There is no room in considering an application under Section 281 for a response that is speculative, predicated on imponderables and unknowns such as litigation outcomes, or on suppositions that all stay orders obtained by an assessee are bound to be vacated and an assessee’s appeals lost";  HC notes that assessee has available assets in excess of Rs. 80,000 crores of which roughly assets of Rs. 49,000 crores assets have some form of encumbrance on them, while the remaining are not so encumbered; However, without rendering a decision on the merits of assessee’s application, HC directs AO to consider assessee’s application afresh, uninfluenced by the previous order, further lays down timelines and directs both the parties to consider provisions of Sec. 281 and Circular No.4/2011 setting out the guidelines for the grant of prior permission u/s. 281 :HC