Pending stay petition in tax appeal: recovery proceedings kept in abeyance until the appellate authority decides the stay request

Where an appeal was pending with a stay petition, the Court directed the appellate authority to decide the stay application within one month of receiving a certified copy of the judgment. Pending that decision, coercive recovery of the balance income-tax demand was ordered to remain in abeyance. The ruling reflects that, when stay relief is pending before the appellate forum, recovery action may be restrained until the stay request is considered and decided.

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Issues: Whether the appellate authority should be directed to dispose of the stay petition expeditiously and whether recovery proceedings should remain in abeyance until such disposal.

Analysis: The writ petition arose from an assessment demand under the Income-tax Act and the pendency of an appeal accompanied by a stay petition before the appellate authority. In view of the pending stay petition, the Court directed the appellate authority to consider and pass orders on the stay petition within one month from receipt of a certified copy of the judgment. The Court also directed that coercive recovery proceedings for the balance demand be kept in abeyance until orders were passed on the stay petition.

Outcome: Directions issued to the appellate authority to decide the stay petition within one month and recovery proceedings were stayed in the meantime.

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