Interim protection against disputed tax recovery granted while appeal and stay application remained pending before appellate authority.

Where the assessee's appeal and stay application were pending before the appellate authority, the HC held that immediate recovery of the disputed demand could prejudice the assessee. Interim protection was therefore granted, and recovery was restrained until the next date or until the stay application was decided by the appellate authority, whichever was earlier.

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Issues: Whether recovery of the disputed demand could be stayed pending consideration of the assessee's appeal and stay application before the appellate authority.

Analysis: The appeal and stay application were pending before the appellate authority and had not been taken up for consideration. In that situation, immediate recovery under the challenged circular was found capable of causing prejudice to the assessee. The Court therefore granted interim protection and restrained recovery until the next date or until disposal of the stay application by the appellate authority, whichever was earlier.

Conclusion: Recovery of the disputed amount was stayed in favour of the assessee pending further consideration.

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