Interim stay on tax recovery pending first appeal preserves the assessee's appellate remedy and limits coercive enforcement.

Pending disposal of the first appeal, coercive recovery of the disputed tax demand was kept in abeyance to preserve the efficacy of the appellate remedy. The Court noted that a similar controversy had earlier been met with protection against recovery, and, on the material before it, granted limited interim relief to the assessee. Recovery proceedings were stayed for four months or until the first appellate authority decided the appeal, whichever was earlier. The operative effect was temporary protection from immediate recovery during the pendency of the first appellate proceedings.

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Issues: Whether the recovery proceedings for the disputed tax demand should be stayed pending disposal of the first appeal.

Analysis: The revision arose from an order of the Tribunal directing partial deposit as a condition for protection against recovery. The Court noted that an identical controversy had earlier been addressed by granting protection against coercive recovery while the appeal remained pending. In view of the pending first appeal and the material on record, the Court considered it appropriate to protect the assessee from immediate recovery for a limited period.

Conclusion: The recovery proceedings were stayed for four months or until the first appellate authority decided the first appeal, whichever was earlier, thereby granting limited relief to the assessee.

Final Conclusion: The revision resulted in interim protection against coercive tax recovery during the pendency of the first appeal.

Ratio Decidendi: Where a tax appeal remains pending, recovery proceedings may be stayed for a limited period to preserve the efficacy of appellate remedy.

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