Pending stay application bars coercive recovery until appellate authority decides interim relief on settled tax-demand criteria.

Recovery of a disputed tax demand should not proceed coercively while a bona fide stay application remains pending before the appellate authority. The Court applied the instruction requiring expeditious disposal of stay requests and held that interim relief must be considered on settled parameters of prima facie case, financial stringency and balance of convenience. Accordingly, the impugned recovery communication was set aside and coercive recovery was restrained until the stay application is decided.

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Issues: Whether recovery proceedings could be pursued while the assessee's stay application against the assessment demand was pending before the appellate authority.

Analysis: The assessment demand had already been carried in appeal and a stay application was pending before the appellate commissioner. Recovery action was initiated despite the pending stay request. In this setting, the Court applied the administrative instruction requiring stay applications to be disposed of expeditiously and held that coercive recovery should not proceed until the stay request was considered on the usual parameters of prima facie case, financial stringency and balance of convenience.

Conclusion: The impugned recovery communication was set aside and coercive recovery was restrained pending disposal of the stay application, in favour of the assessee.

Ratio Decidendi: Recovery of disputed tax demand should not be pursued coercively while a bona fide stay application is pending before the appellate authority and the request must be decided expeditiously on settled interim-relief parameters.

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