Statutory appeal protection bars coercive recovery when pre-deposit is made and the appeal is entertained.

Recovery proceedings cannot continue where statutory appeals have been filed in terms of judicial directions, the required pre-deposit has been made, and the appeals have been entertained. In that setting, a demand treating the earlier time limit as expired and seeking coercive recovery is inconsistent with the subsisting appellate process and the protection already granted. The result is that the recovery order is liable to be quashed, while the assessee's right to pursue the appeals with the benefit of the earlier directions remains intact during pendency of the appeals.

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Issues: Whether the impugned recovery order demanding payment of the arrears within seven days was sustainable when the assessee had filed statutory appeals pursuant to the Supreme Court's directions and had already made the required pre-deposit.

Analysis: The writ petition challenged a recovery demand issued after the Division Bench had granted time to file statutory appeals on payment of 25% of the tax demanded and had protected the assessee by interim stay in the meantime. The subsequent Supreme Court order permitted the assessee to approach the appellate authority within six weeks and directed that the appeal not be rejected on limitation if filed within that period. The assessee filed the appeals with the prescribed pre-deposit, and the appellate authority entertained them. In that situation, the impugned order treating the earlier time limit as having expired and initiating recovery was held to be contrary to the effect of both prior orders and to the subsisting appellate process.

Conclusion: The impugned recovery order was unsustainable and was quashed; the writ petition was allowed.

Final Conclusion: The assessee's right to pursue the statutory appeals with the benefit of the earlier protective directions was preserved, and coercive recovery could not proceed during the pendency of the entertained appeals.

Ratio Decidendi: Where appellate remedies have been invoked and entertained in terms of judicial directions granting time and interim protection, a recovery order that disregards those directions and the pending appeal process is liable to be set aside.

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