Stay of demand pending appeal depends on prima facie case and balance of convenience, with illustrative guidelines not treated as exhaustive.

Stay of demand pending appeal must be tested on settled factors such as prima facie case and balance of convenience. The article notes that an arguable challenge existed where the demand related to by-products from milling paddy, and that immediate recovery through freezing bank accounts would seriously prejudice public utility operations and the public interest. It also states that revenue's circular was only illustrative and could not be treated as exhaustive or inflexible. On that basis, recovery was stayed and coercive steps were restrained until the appeal was decided.

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Issues: Whether the petitioner was entitled to stay of demand pending disposal of the appeal.

Analysis: The impugned orders did not consider the relevant factors governing stay, including the existence of a prima facie case and the balance of convenience. The demand related to by-products arising from milling paddy, and the petitioner's contention that no separate charge was made for such by-products raised an arguable issue for consideration in appeal. The balance of convenience also favoured protection against immediate recovery, as freezing the petitioner's bank accounts would cause serious prejudice to its public utility operations and to the public at large. The circular relied upon by the revenue was only illustrative and could not be treated as exhaustive of the grounds for grant of stay.

Conclusion: The petitioner was entitled to stay of the demand pending hearing and final disposal of the appeal, and the impugned orders were liable to be set aside.

Final Conclusion: Recovery was stayed and coercive steps were restrained until the appeal was decided.

Ratio Decidendi: In considering stay of demand pending appeal, the authority must apply the settled factors of prima facie case and balance of convenience, and illustrative administrative guidelines cannot be treated as exhaustive or inflexible.

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