Proportionate stay conditions for disputed tax demand were moderated, with faster disposal ordered for the pending appeal.

Stay on recovery of the disputed tax demand was found to require a reasonable and proportionate payment schedule, especially where the assessment was described as high-pitched and hardship to the assessee had been acknowledged. The court therefore moderated the revised monthly instalment condition to align with the earlier arrangement and the assessee's financial position. It also directed the Commissioner of Income Tax (Appeals) to dispose of the pending appeal within three months, to ensure timely adjudication of the substantive dispute.

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Issues: Whether the condition imposed for payment of tax demand in the stay order deserved modification, and whether directions were required for early disposal of the pending appeal.

Analysis: The Commissioner had initially granted stay on a structured payment arrangement, but the impugned review order required substantially higher monthly installments. The Court noted that the assessment was stated to be high-pitched, that hardship to the assessee had been acknowledged, and that the earlier arrangement had proceeded on a much lower installment basis. In these circumstances, the Court held that the revised demand schedule ought to be moderated to remain consistent with the earlier approach and the assessee's financial position. The Court also considered it necessary to secure timely adjudication of the appellate proceedings.

Conclusion: The installment condition was modified in favour of the assessee by reducing the payment requirement to Rs. 15 crores per month, and the Commissioner of Income Tax (Appeals) was directed to decide the appeal within three months.

Ratio Decidendi: A stay condition for recovery of disputed tax demand must be reasonable and proportionate to the circumstances, particularly where hardship is acknowledged and the demand schedule is inconsistent with the earlier arrangement.

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