Tax stay conditions must match recorded hardship findings; inconsistent deposit demands are unsustainable, while refund relief may require separate proceedings.

A stay application on tax demand must be decided consistently with the Tribunal's own findings on prima facie case and financial hardship. Where the Tribunal records that a prima facie case is made out and that full deposit would cause undue hardship, a further direction to deposit 10% of the disputed tax is arbitrary, illegal, and unsustainable. In revisional jurisdiction, however, the Court would not order refund of amounts already recovered from the assessee's account when the challenge is confined to the stay order, leaving the assessee to seek separate appropriate relief. The stay order was therefore interfered with and the appeal was directed to be decided expeditiously on merits.

---

---

Issues: (i) Whether the Tribunal was justified in directing deposit of 10% of the disputed tax after recording that a prima facie case was made out and that full deposit would cause undue financial hardship; (ii) Whether, in revisional jurisdiction, the Court could direct refund of amounts recovered from the assessee's account.

Issue (i): Whether the Tribunal was justified in directing deposit of 10% of the disputed tax after recording that a prima facie case was made out and that full deposit would cause undue financial hardship.

Analysis: The stay application was required to be decided on the basis of whether a prima facie case existed and whether insisting on deposit would cause undue financial hardship. Once the Tribunal recorded both that a prima facie case was made out and that full deposit would cause hardship, the direction to still require deposit of 10% of the tax was inconsistent with its own findings and could not be supported. The order was held to be arbitrary, illegal, and contrary to settled law on stay of demand.

Conclusion: The issue was decided in favour of the assessee and against the Department.

Issue (ii): Whether, in revisional jurisdiction, the Court could direct refund of amounts recovered from the assessee's account.

Analysis: The revision was confined to the challenge against the Tribunal's stay order. On that limited revisional scope, the Court declined to issue a refund direction for amounts already recovered, leaving the assessee to pursue appropriate proceedings separately.

Conclusion: The issue was decided against the assessee to the extent that no refund direction was granted in the revision.

Final Conclusion: The impugned stay order was interfered with, the revisionist obtained relief on the legality of the stay determination, and the appellate authority was directed to hear and decide the appeal on merits expeditiously.

Ratio Decidendi: A stay application involving tax demand must be decided consistently with recorded findings on prima facie case and financial hardship, and an order imposing deposit despite such findings is arbitrary and unsustainable.

---