Stay of recovery for fiscal penalty requires objective consideration of all relevant factors, not a mechanical refusal.

An order refusing stay of recovery of a fiscal penalty is unsustainable where the authority does not objectively consider the grounds in appeal or revision, the seriousness of the issues, the assessee's conduct, the likelihood of recovery, and the hardship of immediate payment. A prima facie approach that ignores material factors amounts to non-exercise of discretion and may be interfered with under Article 226. As the dispute concerned penalty and raised substantial contested issues, the summary refusal of stay was quashed.

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Issues: Whether the order refusing stay of recovery of penalty under section 45A of the Kerala General Sales Tax Act, 1963 was liable to be quashed for failure to consider relevant facts and circumstances.

Analysis: An order on stay must be passed on an objective consideration of the grounds raised in the appeal or revision, the seriousness of the issues involved, the assessee's conduct, the likelihood of recovery, and the hardship caused by immediate payment. Where the impugned order is based on a prima facie approach but ignores material considerations bearing on the grant of stay, it amounts to non-exercise of discretion and may be interfered with under article 226. The dispute concerned penalty, not tax, and substantial disputed questions required fuller consideration rather than summary rejection of stay.

Conclusion: The refusal of stay was held unsustainable and was quashed in favour of the assessee.

Ratio Decidendi: A stay order affecting recovery of a fiscal penalty must reflect consideration of all relevant factors and not be founded on an incomplete or mechanical assessment of the material before the authority.

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