Recovery notice based on a non est circular stayed, with interim protection granted against coercive recovery and contempt notice issued.

A recovery demand based on a circular already declared non est for cases where appeals and stay applications were pending without fault of the assessee could not be enforced by coercive recovery. The Court found the impugned notice relied on the very same circular despite the prior binding determination, and treated that reliance as prima facie disobedience of its earlier order. Interim protection was therefore granted by staying the demand notice and preserving the status quo against recovery, while contempt notice was directed against the concerned officer.

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Issues: Whether a demand notice for recovery could be sustained when it was founded on a circular already held to be non est in relation to cases where appeals with stay applications were pending without fault of the assessee; and whether the impugned recovery action and the notice deserved to be stayed.

Analysis: The Court noted that the challenged circular had already been declared non est to the extent it directed recovery in situations where appeals and stay applications had been filed but no stay had been granted and the delay in disposal of the stay applications was not attributable to the assessee. It found that the impugned demand notice proceeded on the very same circular despite that prior determination. The Court treated the notice as a prima facie act of defiance of its earlier order and held that coercive recovery could not be pursued on that basis.

Conclusion: The demand notice was stayed and the petitioner obtained interim protection against coercive recovery; the Court also directed issuance of notice in contempt against the concerned officer.

Final Conclusion: The order granted interim relief to the petitioner, preserved the status quo against recovery, and initiated contempt scrutiny for alleged disobedience of the earlier binding order.

Ratio Decidendi: A recovery notice founded on a circular already held non est for pending stay-application cases cannot be enforced by coercive recovery, and interim protection must follow where the notice ignores that binding determination.

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