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AI Drafter - (New and Powerful) ✕
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the revisional authority's order directing deposit of 60 per cent of the penalty amount and furnishing of security for the balance, despite recording that the petitioner had made out a prima facie case for stay, was valid.
Analysis: The authority had expressly found that a prima facie case for stay was made out, yet it nevertheless required substantial cash deposit. Such a direction was treated as mechanical and as showing that the discretion in the stay application had not been properly exercised. An order on stay must reflect application of mind to the relevant considerations; failure to do so amounts to non-exercise of discretion and is amenable to interference in writ jurisdiction.
Conclusion: The stay order was invalid and was set aside. Interim protection against collection of the penalty was granted, and the revision was directed to be disposed of expeditiously.
Final Conclusion: The petitioner succeeded in obtaining interference with the impugned stay condition, resulting in protection from recovery of the penalty pending disposal of the revision.
Ratio Decidendi: A stay order that imposes onerous payment conditions despite recording a prima facie case for stay, without proper application of mind to relevant considerations, is a mechanical exercise of discretion and can be quashed in writ jurisdiction.
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