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AI Drafter ✕ 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 High Court could grant stay of recovery of the disputed tax demand during pendency of a reference under section 24(1) of the Orissa Sales Tax Act, 1947 despite the prohibition urged under section 24(7) of that Act.
Analysis: The availability of jurisdiction under Article 226 of the Constitution to grant stay in an appropriate case was recognised, though its exercise had to be considered in light of section 24(7) of the Orissa Sales Tax Act, 1947. The Court noted that the dispute concerned taxability of supplies made to contractors and that the petitioner had already paid a substantial portion of the demand. Without expressing any opinion on the merits of the pending reference, the Court considered the nature of the dispute and the extent of payment already made as relevant factors for interim protection.
Conclusion: Conditional stay of recovery of the balance demand was granted on payment of the specified amount, and the balance was stayed until disposal of the reference.
Final Conclusion: The petitioner obtained limited interim relief against recovery, subject to compliance with the payment condition, while the merits of the tax dispute remained open before the Tribunal.
Ratio Decidendi: In an appropriate case, the High Court may exercise writ jurisdiction to grant interim stay of recovery during pendency of a statutory reference, but such relief must be assessed in the light of the governing statutory restriction and the surrounding facts, including the amount already paid.
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