Interim restraint on tax recovery requires balance of convenience and public interest, not just a prima facie case.

Interim restraint against collection of tax or duty under article 226 should be granted only in exceptional circumstances, because a levy does not become invalid merely due to the filing of a writ petition. The court must assess balance of convenience, irreparable injury and public interest before interfering with recovery of public revenue, and a prima facie case or bank guarantee alone is insufficient. Interlocutory relief should not effectively grant the final relief at the interim stage, especially where governmental revenue and administration may be prejudiced. On these principles, the High Court's interim orders were unsustainable and were set aside, with the matter decided in favour of Revenue.

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Issues: Whether an interim order in a revenue matter under article 226 of the Constitution could be sustained merely on a prima facie case and a bank guarantee, without a clear balance of convenience in favour of the applicant and due regard to public interest.

Analysis: The Court held that interlocutory relief in tax and revenue matters must be granted with great circumspection. A levy does not become invalid merely because a writ petition is filed, and the court must consider the balance of convenience, irreparable injury, and public interest before restraining collection of public revenue. The Court disapproved orders that practically grant the principal relief at the interim stage, particularly where governmental revenue is involved and the administration may be seriously prejudiced. The Court also emphasised that public authorities are presumed to act bona fide and that interim orders should not be made for the mere asking on a shown prima facie case alone.

Conclusion: The interim orders granted by the High Court were unsustainable and were set aside; the issue was decided against the assessee and in favour of Revenue.

Final Conclusion: Interim relief against recovery of excise duty could not be granted on the facts, and the appeal succeeded with costs.

Ratio Decidendi: In revenue matters under article 226, interim restraint against collection of tax or duty should be granted only in exceptional circumstances where the balance of convenience and public interest clearly justify it; a prima facie case alone is not enough.

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