Appellate stay petitions cannot be blocked by prior endorsement from the assessing authority under the sales tax scheme.

The Madras HC held that Section 31 of the Tamil Nadu General Sales Tax Act, 1959 and Rule 31(2) do not impose a condition precedent requiring an assessee to obtain an endorsement from the assessing authority before the appellate authority can receive a stay petition or appeals. The assessing authority's insistence on prior endorsement and return of the papers was found to be unwarranted under the statutory scheme. The assessee was therefore entitled to have the appeals and stay applications received and considered on merits without that precondition.

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Issues: Whether the assessee was required to obtain an endorsement from the assessing authority regarding filing of bank guarantee and security before the appellate authority could entertain the stay petition and appeals.

Analysis: The challenge was to the insistence on an endorsement from the assessing authority as a pre-condition for moving the appellate authority on the stay request. The Court applied the earlier view that Section 31 of the Tamil Nadu General Sales Tax Act, 1959 and Rule 31(2) of the Rules do not create any condition precedent requiring the assessee to furnish security before approaching the appellate authority for stay. The return of the papers by the assessing authority was held to be without warrant and based on an understanding of the statutory scheme and the powers of the authorities.

Conclusion: The requirement of an endorsement from the assessing authority was held impermissible, and the assessee was entitled to have the appeals and stay petitions received and considered on merits.

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