Provisional bank attachment ends after reassessment; coercive recovery should await decision on a timely stay application.

Provisional attachment of bank accounts made during reassessment does not ordinarily survive once the reassessment proceedings culminate, because the basis for that interim restraint ceases; the attachment was to be withdrawn. Where an assessee has filed a timely appeal with a stay application, revenue authorities should ordinarily refrain from coercive recovery until the stay request is decided, unless exceptional circumstances such as assessee default or delay attributable to the assessee exist. Recovery by debiting the bank account during pendency of the stay application was treated as inconsistent with that approach, and coercive recovery was restrained pending decision on the stay request.

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Issues: (i) whether the provisional attachment of the assessee's bank accounts could continue after reassessment proceedings had culminated; and (ii) whether coercive recovery could be pursued while the assessee's appeal with a stay application was pending.

Issue (i): whether the provisional attachment of the assessee's bank accounts could continue after reassessment proceedings had culminated.

Analysis: The attachment had been made during the pendency of reassessment proceedings under the provisional attachment power. Once the reassessment order was passed, the basis for continuation of that attachment ceased. In view of the State's statement that the attachment would be withdrawn, no further adjudication was required on the prayer directed against the attachment.

Conclusion: The continuation of the bank account attachment was not warranted after reassessment, and the attachment was directed to be withdrawn.

Issue (ii): whether coercive recovery could be pursued while the assessee's appeal with a stay application was pending.

Analysis: Where an appeal is filed within limitation along with a stay application, the recovery authority is expected to act reasonably and refrain from coercive measures until the stay application is decided, unless there are exceptional circumstances such as default by the assessee or unnecessary delay attributable to the assessee. Recovery by debit from the bank account during pendency of the stay application was therefore inconsistent with that requirement.

Conclusion: Further coercive recovery was restrained until the stay application was heard and decided.

Final Conclusion: The petition succeeded in part: the provisional attachment issue became infructuous upon the State's statement, and coercive recovery was stayed pending decision on the appeal-related stay application.

Ratio Decidendi: Where an assessee has filed an appeal with a stay application within limitation, revenue authorities should ordinarily defer coercive recovery until the stay request is decided, absent exceptional circumstances.

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