Stay of tax recovery barred during reference proceedings under section 45, though one judge favoured inherent power to grant relief.

Section 45(7) of the Delhi Sales Tax Act, 1975 was construed as an express bar on staying recovery of tax and penalty once the Appellate Tribunal has determined liability and a reference is pending before the High Court. The majority treated stay as incidental to appellate jurisdiction under section 45(5), but not available in referential proceedings under section 45, and held that section 151 CPC could not override the statutory prohibition. It was therefore stated that the High Court cannot grant stay of recovery pending a reference or an application under section 45(2). One judge dissented, taking a broader view of the court's powers.

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Issues: Whether the High Court has jurisdiction to grant stay of recovery of tax and penalty pending a reference or an application under section 45 of the Delhi Sales Tax Act, 1975.

Analysis: The majority held that section 45(7) contains an express and comprehensive prohibition against stay of payment of tax and penalty after the Appellate Tribunal has ?determined liability and while the reference is pending before the High Court. The power of stay was treated as incidental to appellate jurisdiction under section 45(5), but not as part of the referential jurisdiction under section 45. The words of section 45(7) were construed as applying both to references made under section 45(1) and to references arising in consequence of an application under section 45(2), and the High Court was held not to possess inherent power under section 151 of the Code of Civil Procedure to override that statutory bar.

Conclusion: The High Court has no power to grant stay of recovery of tax pending disposal of a reference or a section 45(2) application, and the stay application was not competent.

Dissenting Opinion: One Judge held that section 45(7) does not expressly cover section 45(2), that the High Court's powers under section 45(2) are akin to mandamus under article 226 of the Constitution of India, and that the High Court retains inherent power under section 151 of the Code of Civil Procedure to grant stay of recovery of tax in appropriate cases.

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