Stay of tax recovery conditioned on instalment payment and early hearing, with protection withdrawn for unjustified adjournment.

Pending tax appeal recovery may be stayed where the Tribunal balances the assessee's financial position, the absence of security, and Revenue protection. Here, the Tribunal granted a limited stay on coercive recovery, directed an out-of-turn hearing within a fixed timeframe, and linked continued protection to payment of part of the demand in instalments. It also made the stay conditional on cooperation at the hearing stage, providing that it could be vacated if the assessee sought adjournment without reasonable cause.

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Issues: Whether recovery of the outstanding tax demand should be stayed pending disposal of the appeal, and whether the appeal should be fixed for early hearing on conditions.

Analysis: The Tribunal took note of the assessee's financial position, the absence of any offered security, and the existence of sundry debtors and liabilities. Balancing the need for protection of the Revenue with the pendency of the appeal, it considered that an out-of-turn hearing could be directed on payment of a part of the demand in instalments, while also safeguarding the assessee against immediate coercive recovery for a limited period.

Conclusion: The demand was stayed up to 30 November 1994, the appeal was directed to be heard in the third week of November 1994 on payment of Rs. 1 lakh in two instalments, and the stay was liable to be vacated if the assessee sought adjournment without reasonable cause.

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