Stay petitions under Rule 31 must be decided by the appellate authority, not controlled by the assessing authority.

Rule 31 of the Tamil Nadu General Sales Tax Rules, 1959 vests the first discretion to consider a stay request, and to require or specify security, in the appellate authority before which the appeal is pending. The assessing authority cannot insist that a stay petition be entertained only on a particular form of security, nor can it control or return the application at the threshold on that basis. The appellate authority must decide the stay request on merits and may grant stay with or without security, including personal security, property security, bank guarantee, or instalments as warranted. A mandamus was considered appropriate to require fresh receipt and lawful disposal of the stay application.

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Issues: (i) Whether the assessing authority could insist that a stay petition be considered only on the furnishing of security in a particular form. (ii) Whether, under rule 31 of the Tamil Nadu General Sales Tax Rules, 1959, the appellate authority alone was required to decide the stay application and specify the security, if any, before the assessee approached the assessing authority.

Issue (i): Whether the assessing authority could insist that a stay petition be considered only on the furnishing of security in a particular form.

Analysis: Rule 31(1) empowers the authority before whom the appeal or revision is pending to decide, in its discretion, whether security should be furnished and, if so, in what form it should be furnished. Rule 31(2) operates only after such an order is made and cannot be read independently so as to confer power on the assessing authority to control the stay application or prescribe the form of security at the threshold. The assessing authority therefore had no jurisdiction to return the stay petition on the basis stated.

Conclusion: The insistence by the assessing authority was illegal and without jurisdiction.

Issue (ii): Whether, under rule 31 of the Tamil Nadu General Sales Tax Rules, 1959, the appellate authority alone was required to decide the stay application and specify the security, if any, before the assessee approached the assessing authority.

Analysis: The scheme of rule 31 shows that the appellate authority is the first authority competent to consider the stay request. It may grant stay without security, or impose a condition requiring personal security, property security, bank guarantee, or even instalments, but the decision must be taken on merits by that authority itself. The assessing authority cannot usurp or be delegated that function. Since the appellate authority had also returned the stay petition on a mistaken understanding of rule 31(2), a mandamus was warranted directing it to receive the stay application when re-presented and dispose of it according to law.

Conclusion: The appellate authority was required to hear and decide the stay petition on merits, and the assessing authority had no role in considering it.

Final Conclusion: The writ petition succeeded, the impugned return of the stay petition was quashed, and the appellate authority was directed to consider the stay application on merits upon proper re-presentation, with interim protection against recovery until such disposal.

Ratio Decidendi: Where a statutory scheme vests the first discretion to require and specify security in the appellate authority, that function cannot be shifted to the assessing authority, and any stay application must be decided by the authority to which the appeal is pending.

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