Reasoned stay orders under tax appeal discretion required; mechanical refusal without reasons is unsustainable.

The appellate authority's discretion under section 31(5) of the Tamil Nadu General Sales Tax Act, 1959 must be exercised judicially on relevant considerations such as prima facie case, hardship, ability to pay, security offered and public revenue. A mechanical refusal to grant stay without reasons amounts to non-application of mind and is unsustainable. The authority must therefore issue a reasoned, speaking order on a stay application; where that is not done, the order is liable to be set aside and the matter remitted for fresh consideration.

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Issues: Whether the appellate authority, while dealing with a stay petition under section 31(5) of the Tamil Nadu General Sales Tax Act, 1959, must exercise discretion judicially and pass a speaking order after considering relevant factors, and whether a mechanical refusal to grant stay without reasons is sustainable.

Analysis: Section 31(5) confers discretion on the appellate authority to regulate payment of tax pending appeal where sufficient security is furnished. The discretion is not arbitrary and must be exercised on relevant considerations, including a prima facie case, the quantum involved, the assessee's capacity to pay, hardship, the nature of security offered, and the effect on public revenue. A refusal to grant stay without reasons shows non-application of mind. The reasons for the decision are necessary to indicate that the statutory discretion has been duly exercised; once such discretion is properly exercised, judicial interference is ordinarily unwarranted.

Conclusion: The appellate authority must pass a reasoned and speaking order on a stay application, and a non-speaking mechanical rejection is unsustainable. The impugned orders were liable to be set aside and the matters remitted for fresh consideration.

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