Importance of Hearing Before Stay Revocation to Uphold Natural Justice

The case involved issues of compliance with stay order conditions, the requirement of a hearing before stay withdrawal, automatic revocation of stay orders, and the legal requirement for a separate order of stay withdrawal. The Third Member agreed with the Accountant Member that a hearing was necessary before revoking the stay order to uphold principles of natural justice. The case was scheduled for a hearing in open court to determine the revocation of the stay granted on 19-11-1993, ensuring fairness for the appellant.

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Issues Involved:
1. Compliance with Stay Order Conditions
2. Requirement of Hearing Before Stay Withdrawal
3. Automatic Revocation of Stay Order
4. Legal Requirement for Separate Order of Stay Withdrawal

Detailed Analysis:

1. Compliance with Stay Order Conditions:
The appellant filed a stay petition on 11-11-1993 for a total demand of Rs. 6,65,920 for the assessment years 1979-80 to 1987-88. The Tribunal, on 19-11-1993, directed the appellant to pay Rs. 1,65,920 within 30 days and furnish security for the remaining Rs. 5 lakhs. The appellant was required to comply with these conditions and inform the Tribunal. Despite the appellant's claim of compliance through letters dated 4-1-1994 and 18-2-1994, the Tribunal found no proof of payment of Rs. 1,65,920 and decided to withdraw the stay due to non-compliance.

2. Requirement of Hearing Before Stay Withdrawal:
The Accountant Member disagreed with the Judicial Member's decision to withdraw the stay without a hearing, emphasizing the principle of natural justice. He cited the Supreme Court's decision in CB Gautam v. Union of India, arguing that the appellant should be given an opportunity to be heard before any modification or cancellation of the stay order. The Judicial Member maintained that the appellant was heard on 25-3-1994, but the Accountant Member contended that the hearing on that date did not address the proposed withdrawal of the stay.

3. Automatic Revocation of Stay Order:
The Judicial Member argued that the stay order automatically became ineffective due to the appellant's non-compliance with the payment and security conditions. He stated that no separate legal order was necessary for the stay's revocation. The Third Member, however, noted that this issue was first mentioned in the supplementary order dated 26-8-1994 and was not part of the original dissenting opinion. Thus, there was no actual difference of opinion on this point between the Judicial and Accountant Members.

4. Legal Requirement for Separate Order of Stay Withdrawal:
The Judicial Member's supplementary order suggested that a separate order to revoke the stay was unnecessary due to automatic revocation upon non-compliance. The Third Member clarified that the Accountant Member had no opportunity to express his opinion on this issue, as it was introduced in the supplementary order. Therefore, the Third Member concluded that there was no real difference of opinion on this matter either.

Conclusion:
The Third Member agreed with the Accountant Member that a hearing was required before revoking the stay order, aligning with the principles of natural justice. The case was to be fixed for a hearing in open court on a Friday to decide the issue of revocation or otherwise of the stay granted on 19-11-1993. The matter was to be decided according to the majority opinion, ensuring that the appellant receives a fair opportunity to present their case.

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