Coercive recovery barred while appeal and stay application remain pending, as recovery should await appellate consideration

Coercive recovery should ordinarily be withheld where an assessee has filed an appeal with a pending stay application and is not responsible for any delay or inaction. In these circumstances, the Bombay High Court protected the assessee from recovery action on the confirmed demand until the Commissioner (Appeals) disposed of the stay application. The Court also directed the assessee to appear before the appellate authority for appropriate consideration, reinforcing that recovery pursuant to the impugned notice should not proceed while stay relief remains undecided.

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Issues: Whether recovery steps could be taken against the petitioner while the appeal and stay application were pending before the Commissioner (Appeals).

Analysis: The demand had been confirmed, but the petitioner had already filed an appeal along with a stay application and there was no delay or inaction on its part. In these circumstances, and bearing in mind the earlier judgment dealing with the validity of the revenue circular, the Court protected the petitioner from coercive recovery until the stay application was decided.

Conclusion: Recovery pursuant to the impugned notice was stayed until disposal of the stay application, and the petitioner was directed to appear before the Commissioner (Appeals) for appropriate consideration.

Ratio Decidendi: Where an assessee has a pending appeal with a pending stay application and is not at fault for delay, coercive recovery should ordinarily await disposal of the stay application.

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