Stay against tax recovery depends on prima facie case, balance of convenience, and fair record verification in appeal.

Stay against tax recovery should be assessed on settled factors of prima facie case, balance of convenience, and comparative injury, and a brief order is sufficient if it shows application of mind. Repeated adjournments do not by themselves establish adequate opportunity where the assessee says further declaration forms may materially affect the demand; additional forms may be received if justified. Fair appellate adjudication may also require verification of records at branch premises where the volume and nature of documents warrant it. The appellate authority was therefore permitted to consider branch inspection and was directed to hear and decide the pending appeal and related reassessment matters expeditiously without unnecessary adjournments.

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Issues: (i) Whether the stay order on the disputed sales tax demand called for interference and what principles govern consideration of stay; (ii) whether the appellate authority should be enabled to verify records at the assessee's branches and ensure early disposal of the pending appeal and related proceedings.

Issue (i): Whether the stay order on the disputed sales tax demand called for interference and what principles govern consideration of stay.

Analysis: The stay application had to be examined on settled parameters, namely the prima facie nature of the case, balance of convenience, and comparative loss or injury to the parties. A stay order need not be elaborate, but it must show application of mind and indicate that the relevant grounds were considered. The Court also held that mere repetition of adjournments does not by itself establish that adequate opportunity was afforded, particularly where the assessee claims that relevant declaration forms and materials could materially reduce the tax demand. In such circumstances, the appellate authority could receive additional declaration forms if the facts justified it.

Conclusion: The stay order was interfered with only to the extent of granting conditional protection against recovery, leaving the merits of the assessment open for the appeal.

Issue (ii): Whether the appellate authority should be enabled to verify records at the assessee's branches and ensure early disposal of the pending appeal and related proceedings.

Analysis: The Court accepted that true and fair assessment may require scrutiny of relevant records and, where justified, even inspection at the assessee's business premises. It held that an appellate authority is not barred from visiting branches if the nature and volume of records make such a course appropriate. The Court further emphasised that reassessment proceedings should be completed within a reasonable time and that prolonged pendency is undesirable for both sides. Accordingly, the appeal was directed to be taken up continuously without unnecessary adjournments, and older pending reassessment matters were directed to be disposed of within a specified time frame.

Conclusion: Directions were issued permitting branch verification if justified and mandating expeditious hearing and disposal of the pending matters.

Final Conclusion: The writ petition succeeded only in part by securing conditional stay and procedural directions for fair and prompt appellate consideration, while the substantive tax dispute remained for decision in appeal.

Ratio Decidendi: In matters of stay against tax recovery, the authority must apply the settled tests of prima facie case and balance of convenience, and where the nature of the records warrants it, fair adjudication may justify additional opportunity for production or verification of relevant materials, including branch records.

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