Prima facie case and natural justice justified interim stay of tax recovery and lifting of bank attachment.

A taxpayer showing a prima facie case may obtain interim protection against disputed tax recovery where continued enforcement would impede business and risk rendering the appeal ineffective. The Tribunal treated the balance of convenience as favouring stay, and held that the earlier refusal was arbitrary because it lacked a speaking order and breached natural justice. On that basis, it ordered interim stay of recovery and directed lifting of the bank attachment, while permitting the Revenue to proceed under the prescribed recovery procedure so its interests remained protected.

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Issues: (i) Whether the assessee was entitled to interim stay of recovery of disputed tax pending disposal of the appeal. (ii) Whether the attachment of the assessee's bank accounts should be revoked and the Revenue required to proceed in accordance with law.

Issue (i): Whether the assessee was entitled to interim stay of recovery of disputed tax pending disposal of the appeal.

Analysis: The Tribunal held that the assessee had shown a prima facie case and that the balance of convenience favoured interim protection because the attachment of the bank accounts impeded the conduct of the business and could frustrate the appeal. The Tribunal also found that the prior refusal by the revenue authority was arbitrary, vitiated by failure to follow natural justice, and contrary to the obligation to pass a speaking order before rejecting the request for stay.

Conclusion: Interim stay of recovery was granted in favour of the assessee.

Issue (ii): Whether the attachment of the assessee's bank accounts should be revoked and the Revenue required to proceed in accordance with law.

Analysis: Having accepted the assessee's claim as prima facie correct and noting that the Revenue had adequate statutory protection for recovery, the Tribunal directed that the bank attachment be lifted. It further permitted the Revenue to issue notice under the prescribed recovery procedure so that its interest would remain safeguarded while the stay operated.

Conclusion: The attachment of the bank accounts was directed to be revoked, and the Revenue was left free to proceed under the recovery provisions.

Final Conclusion: The assessee obtained interim protection against tax recovery, the bank attachment was lifted, and the matter was left to be heard on merits after the stay relief.

Ratio Decidendi: Where a taxpayer demonstrates a prima facie case and recovery action would frustrate the pending appeal, the Tribunal may grant interim stay and direct lifting of attachment, especially when the prior administrative refusal is arbitrary or contrary to natural justice.

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