Reasoned interim stay in tax matters requires relevant factors and evidence before partial relief can be sustained

Interim protection in tax disputes must be granted on relevant considerations, including prima facie case, balance of convenience, irreparable injury, hardship to the assessee and the interests of revenue. A cryptic order granting only partial stay of a penalty demand, without showing application of mind or reasons for the limited relief, does not satisfy the legal requirement of a speaking order. Financial hardship must also be assessed on relevant evidence. The partial stay orders were therefore set aside, and the matter was remitted to the First Appellate Authority for fresh consideration by a reasoned order.

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Issues: Whether interim orders granting only partial stay of a penalty demand, without disclosing application of mind to the relevant considerations, satisfied the requirement of law.

Analysis: Interim protection in tax matters must be exercised judicially on relevant considerations, including prima facie case, balance of convenience, irreparable injury, hardship to the assessee and the interests of revenue. A stay order cannot be sustained if it is cryptic and does not indicate why partial relief alone has been granted. The materials supporting financial hardship must also be assessed on the basis of relevant evidence, and the order must be reasoned and speaking.

Conclusion: The partial stay orders were held unsustainable and were set aside. The matter was remitted to the First Appellate Authority for fresh consideration of interim protection by a reasoned order.

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