Conditional stay and restitution principles upheld: revenue recovery set aside and refund ordered for breach of interim protection

A conditional stay is not vacated unless its express condition is actually breached; here, the assessee did not seek an adjournment and the Tribunal itself adjourned the matter, so recovery by the revenue was unjustified. The Tribunal also has inherent power to order restitution where money is recovered in violation of an effective interim order, and that power is not lost because the revenue acts unilaterally. The refund direction was therefore upheld, and the assessee remained protected by the subsisting stay until disposal of the appeal.

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Issues: (i) Whether the adjournment granted on 16.01.2013 amounted to a breach of the conditional stay order dated 13.12.2012 so as to vacate the stay and justify recovery by the revenue; (ii) Whether the Tribunal had power to direct refund of the amount recovered during the subsistence of the stay order.

Issue (i): Whether the adjournment granted on 16.01.2013 amounted to a breach of the conditional stay order dated 13.12.2012 so as to vacate the stay and justify recovery by the revenue.

Analysis: The condition in the stay order was that the assessee should not seek an adjournment and should get the appeal decided on the fixed date. The order dated 16.01.2013 showed that counsel merely brought to the Tribunal's notice that a similar AMP issue was pending before a Special Bench, after which the Tribunal itself adjourned the matter. The record did not show any request by the assessee for adjournment. The revenue's later stand that the stay stood automatically vacated was also not reflected in the show cause notice, which instead proceeded on different grounds. On a fair reading, the stay condition was not violated by the assessee.

Conclusion: The stay order did not stand vacated on account of the adjournment, and the recovery action was not justified on that basis.

Issue (ii): Whether the Tribunal had power to direct refund of the amount recovered during the subsistence of the stay order.

Analysis: A tribunal has inherent power to ensure compliance with its interim orders and to redress their violation. If money is appropriated in breach of an effective stay, the Tribunal can direct restitution so that its order is not rendered illusory. The Court held that the Tribunal's power is not defeated merely because the revenue acted unilaterally; if the revenue believed the stay had been violated or vacated, it ought to have sought clarification from the Tribunal rather than recover the amount on its own. The reliance on the Tribunal's power to order refund was therefore upheld.

Conclusion: The Tribunal had jurisdiction to order refund of the amount recovered during the subsistence of the stay order.

Final Conclusion: The recovery made by the revenue was not sustained, and the Tribunal's direction for refund was upheld, leaving the assessee entitled to protection of the subsisting stay until the appeal was decided.

Ratio Decidendi: A conditional stay is not vacated unless its express condition is actually breached, and a tribunal has inherent power to order restitution for money wrongly recovered in violation of an effective interim order.

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