Statutory discretion on stay applications must be exercised on relevant considerations; summary rejection without application of mind is improper.

Section 31(5) of the Madras General Sales Tax Act, 1959 confers a discretion on the Appellate Assistant Commissioner to regulate payment of tax pending appeal, but that discretion must be exercised honestly, objectively, and on relevant considerations. A stay request cannot be rejected in limine without examining the grounds urged, the adequacy of security, and the hardship likely to be caused to the assessee. Applying that principle, the summary rejection of the stay application was improper because the security appeared adequate and there was no indication that the authority had applied its mind to the request. A writ of mandamus was therefore warranted directing reconsideration of the stay application.

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Issues: Whether the Appellate Assistant Commissioner was bound to exercise the statutory discretion under section 31(5) of the Madras General Sales Tax Act, 1959, on the merits of the stay application, and whether a writ of mandamus could issue where the application was rejected summarily without proper consideration.

Analysis: Section 31(5) empowers the Appellate Assistant Commissioner to give directions regarding payment of tax before disposal of the appeal, subject to the appellant furnishing security to his satisfaction. The provision confers discretion, but the discretion is not unfettered or arbitrary: it must be exercised honestly, objectively, and on relevant considerations. The power to stay collection includes the power to refuse stay, grant partial stay, or regulate payment by instalments, but it cannot be treated as a mere formality or rejected in limine without scrutiny of the grounds urged, the sufficiency of security, and the hardship likely to be caused to the assessee. The analogous principle under section 45 of the Income-tax Act was relied upon to explain that a discretionary statutory power for public good carries a corresponding duty to decide the matter properly. In the present case, the security furnished appeared adequate, and nothing showed that the authority had found it insufficient or had applied its mind to the prayer for stay.

Conclusion: The summary rejection of the stay application was improper, and the authority failed to exercise its jurisdiction in accordance with law. A writ of mandamus was warranted directing reconsideration of the stay application.

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