Pending stay applications bar coercive tax recovery until the appellate authority decides how disputed demand should be regulated.

Where an assessment appeal is pending and the stay applications remain undecided, coercive recovery of the disputed tax cannot proceed because the appellate power to regulate payment pending appeal carries a duty to consider the stay request and preserve the effective right of appeal. The High Court held that recovery steps initiated through the Tahsildar were improper in the absence of any order on the stay applications and were liable to be quashed. It further recognised that the appellate authority should dispose of the stay applications within a fixed time before recovery is pursued.

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Issues: Whether recovery of disputed tax could be enforced during pendency of the appeal when the stay applications had not been decided, and whether the appellate authority could be directed to dispose of the stay applications before coercive recovery was pursued.

Analysis: The appeal provisions under the Karnataka Sales Tax Act confer a right to challenge the assessment and also place a duty on the appellate authority to decide how payment of disputed tax should be regulated pending appeal. Where stay applications remain undecided, simultaneous coercive recovery of the full disputed demand frustrates the effective exercise of the right of appeal. The power to grant stay is discretionary, but it is a discretion coupled with a duty to consider the application and pass an appropriate order. In the absence of any order on the stay applications, recovery steps initiated through the Tahsildar were held to be improper and liable to be quashed.

Conclusion: Recovery of the disputed tax could not be pursued while the stay applications remained pending, and the recovery proceedings were liable to be set aside.

Final Conclusion: The assessee was entitled to protection against coercive recovery until the appellate authority decided the stay applications, and the appellate authority was required to act within a fixed time.

Ratio Decidendi: Where an appeal against assessment is pending with a stay application unresolved, the authority vested with power to regulate payment of disputed tax must exercise that power before coercive recovery is undertaken, because the discretion is coupled with a duty to protect the effective right of appeal.

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