Stay of assessment justified where seized documents were material and summons application had to be decided first.

Assessment proceedings were held to warrant a stay where the disputed documents, seized in a raid, were claimed to be material to the taxpayer's defence and an application to summon them was already pending before the Sales Tax Officer. The Sales Tax Officer was noted to have ample statutory power to summon such documents on a proper case, and any refusal required cogent reasons. Proceeding with the assessment before deciding that application would prejudice the taxpayer's ability to present its case effectively. The assessment was therefore stayed until the application was disposed of, and if allowed, proceedings were to resume only after the documents were produced before the Sales Tax Officer.

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Issues: Whether the assessment proceedings for the disputed years should remain stayed until the Sales Tax Officer decided the petitioner's application for summoning documents in the custody of the Income-tax authorities.

Analysis: The documents seized in the raid were stated to be relevant for the pending assessment proceedings, and the petitioner's request to summon them was already before the Sales Tax Officer. It was held that the Sales Tax Officer had ample power under the Sales Tax Act to summon such documents where a proper case was made out, and that refusal could be justified only for cogent reasons. In the circumstances, proceeding with the assessment before deciding the application would prejudice the petitioner's opportunity to place its case effectively.

Conclusion: The assessment proceedings were directed to remain stayed until the Sales Tax Officer disposed of the application for summoning the documents, and if the application was allowed, proceedings were to recommence only after the documents reached the Sales Tax Officer.

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