Administrative stay of assessment proceedings need not follow prior hearing, but reasons must be recorded and communicated.

A stay of assessment proceedings under the proviso to section 42(1) of the Gujarat Sales Tax Act is an administrative measure, not a quasi-judicial determination, so prior notice and hearing are not required. Because the order affects the assessee by postponing assessment and extending limitation, it should record the reasons for the stay and be communicated to the assessee. On the facts, the High Court accepted that the stay order was actually made on 31 August 1987 and was not shown to be ante-dated or invalid merely because service was delayed.

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Issues: (i) Whether an order staying assessment proceedings under the proviso to section 42(1) of the Gujarat Sales Tax Act, 1969 is a quasi-judicial function requiring prior notice and hearing. (ii) Whether such an order must record reasons and be served on the assessee, and whether the impugned stay order was validly made in time.

Issue (i): Whether an order staying assessment proceedings under the proviso to section 42(1) of the Gujarat Sales Tax Act, 1969 is a quasi-judicial function requiring prior notice and hearing.

Analysis: The assessment function itself is quasi-judicial, but the power to stay assessment proceedings is distinct from assessment and is exercised to facilitate completion of assessment in appropriate situations. The stay power may be invoked for administrative exigencies affecting the department or the assessment process as a whole, and it does not decide any lis or quasi-lis between the parties. The mere fact that the order may affect the assessee by extending the limitation period or postponing final assessment does not by itself convert the power into a quasi-judicial one.

Conclusion: The stay power under section 42(1) proviso is administrative, not quasi-judicial, and no prior notice or hearing is required before passing such an order.

Issue (ii): Whether such an order must record reasons and be served on the assessee, and whether the impugned stay order was validly made in time.

Analysis: Even though prior hearing is not required, an order staying assessment proceedings must disclose the necessity for the stay by recording reasons, because the order affects the assessee by extending the limitation period. Since the stay operates upon the assessment proceedings, service of the reasoned order on the assessee is necessary. On the facts, the Court accepted that the impugned order had in fact been passed on 31 August 1987 and was not shown to be ante-dated or invalid merely because service was delayed.

Conclusion: The order was not invalid for want of prior hearing, and the Court accepted that it was validly made on 31 August 1987.

Final Conclusion: The challenge to the stay order failed, with the result that the assessment proceedings were not shown to have become time-barred on the assessee's case.

Ratio Decidendi: A stay of assessment proceedings under the statutory proviso is an administrative measure, not an adjudicatory one; therefore, prior notice and hearing are not mandatory, though reasons must be recorded and communicated to the assessee.

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