Interim stay on cancellation of VAT registration requires reasoned consideration of prima facie case and civil consequences.

Cancellation of registration under the U.P. VAT Act was held fit for interim protection pending the statutory appeal because the tribunal's refusal of stay was cryptic and did not address the relevant material. The court noted that the dealer's business premises and stock position had to be assessed against competing survey reports, and that the tribunal was required to consider civil consequences and whether a strong prima facie case existed. As the settled principles governing interim relief were not applied, the cancellation order was directed to remain stayed during the pendency of the appeal.

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Issues: Whether the cancellation of registration order deserved to be stayed during pendency of the statutory appeal, and whether the Tribunal's refusal to grant stay could stand when it was cryptic and did not consider the relevant material and binding principles governing interim relief.

Analysis: The application for stay arose in a pending appeal against cancellation of registration under Section 17(11) of the U.P. VAT Act, 2008. The material before the Court showed that the dealer's business premises and stock position had to be assessed in light of the competing survey reports, and the Tribunal was required to consider whether the impugned cancellation would cause civil consequences and whether the appellant had a strong prima facie case. The refusal of stay was found to be unsustainable because it was cryptic, did not engage with the facts of the dispute, and did not apply the settled principles governing interim protection pending appeal.

Conclusion: The cancellation order was directed to remain stayed during the pendency of the appeal before the Tribunal.

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