Coercive tax recovery barred while appeal and stay application remain pending before the Tribunal

Coercive tax recovery should not be pursued while a statutory appeal and a pending stay or waiver application remain undecided before the Tribunal, because doing so can render the appellate remedy ineffective. The High Court deprecated post-haste recovery measures and directed that the Tribunal decide the appeal and interim relief application at the earliest. Pending that decision, the departmental authorities were restrained from recovering tax on the basis of the notice and from initiating recovery proceedings under the Land Revenue Act, 1887.

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Issues: Whether the departmental authorities could proceed with coercive recovery of tax when the statutory appeal and the application for stay / waiver of pre-deposit were pending before the Tribunal.

Analysis: The appeal under section 20 of the Punjab General Sales Tax Act, 1948, was still pending, and the request for interim relief had not yet been adjudicated. In such a situation, the remedy of appeal would be rendered ineffective if recovery were pursued by coercive steps before the Tribunal had an opportunity to consider the prayer for stay. The Court deprecated such post-haste recovery measures and directed that the Tribunal should decide the appeal and the interim application at the earliest.

Conclusion: The departmental authorities were restrained from recovering the tax on the basis of the notice until the Tribunal decided the appeal and the stay application, and they were also restrained from initiating recovery proceedings under the Land Revenue Act, 1887.

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