Conditional stay of tax recovery pending reference allowed where reduced demand and part-payment justified interim protection

Pending a reference application under the Orissa Sales Tax Act, the Court noted that section 24(7) bars stay of tax payment due under the Tribunal's order during reference proceedings, and that reference jurisdiction generally carries no inherent or incidental power to stay recovery. It also noted that interim protection may be moulded in suitable cases where the facts justify it. Considering the reduced demand already allowed in appeal and the part-payment made, the Court granted conditional stay of recovery of the balance demand on further payment.

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Issues: Whether, pending disposal of a reference application under section 24(2) of the Orissa Sales Tax Act, 1947, the Court could stay realisation of the balance tax demand raised against the assessee.

Analysis: Section 24(7) of the Orissa Sales Tax Act, 1947 bars stay of payment of tax due in accordance with the Tribunal's order during the pendency of a reference or an application made under section 24(1), though excess tax paid may be refunded if the amount is reduced on reference. The Court noted the general principle that, in reference jurisdiction, it does not possess inherent or incidental power to grant stay of recovery, and that such relief ordinarily lies within the appellate authority's domain. At the same time, the Court observed that appropriate relief may be moulded in suitable cases where the facts justify interim protection, and it considered the reduced demand already granted by the first appellate authority and the part-payment made by the assessee.

Conclusion: The Court granted conditional stay of recovery of the balance demand on payment of an additional amount, and disposed of the writ petition accordingly.

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