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of <h1>High Court Criticizes Tribunal's Rejection of Stay Application, Emphasizes Judicial Principles for Recovery Proceedings</h1> <h3>Shiv Shakti Rubber And Chemicals Works Versus Income-Tax Appellate Tribunal And Others</h3> The High Court addressed the rejection of the stay application by the Income-tax Appellate Tribunal during the pendency of the second appeal. It ... High Court, Orders Passed, Recovery Proceedings Issues:1. Rejection of stay application by Income-tax Appellate Tribunal during pendency of second appeal.2. Interpretation of implied power of stay by the Tribunal.3. Judicial review of the impugned order by the High Court.4. Directions given by the High Court to the Tribunal for reconsideration of the stay application.Analysis:1. The High Court addressed the issue of the rejection of the stay application by the Income-tax Appellate Tribunal during the pendency of the second appeal. The petitioner argued that the Tribunal's reasons for rejection were not justified on judicial principles. The petitioner cited the Supreme Court's decision in ITO v. M. K. Mohammed Kunhi to support the contention that the Tribunal has the implied power to stay recovery proceedings. The Supreme Court emphasized that the power of stay should be exercised judiciously and only in deserving cases to prevent the appeal from being rendered nugatory.2. The High Court analyzed the interpretation of the implied power of stay by the Tribunal. It clarified that the Tribunal has the power to stay recovery proceedings during the appeal but emphasized that this power should not be exercised routinely. The Tribunal must assess if there is a strong prima facie case for granting stay to prevent the purpose of the appeal from being frustrated. The Court highlighted that the Tribunal's refusal to grant stay without considering the prima facie case and citing a policy against granting stays was not in line with judicial principles.3. The High Court conducted a judicial review of the impugned order by the Tribunal. It criticized the Tribunal for not exercising its jurisdictional power judiciously and being influenced by executive considerations. The Court directed the Tribunal to abandon its approach of refusing stay orders based on policy and to consider each case's merits following accepted judicial principles. The Court refrained from quashing the impugned order but instructed the Tribunal to reconsider the stay application based on judicial principles.4. The High Court provided specific directions to the Tribunal for reconsidering the stay application. It directed the Tribunal to abandon its policy against granting stays, consider each case's merits independently, and make a decision based on judicial principles. The Court emphasized that the rejection of the initial stay application would not prevent the petitioner from filing a second application for stay, which the Tribunal must consider. The Court also highlighted the importance of expediting the hearing of the appeal while allowing the petitioner to submit necessary documents for the paper book preparation.
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