Conditional stay of tax recovery granted pending prompt decision on restoration of dismissed appeal, subject to deposit conditions.

Where a tax appeal has been dismissed for default and a restoration application remains pending, the writ court may grant interim protection to preserve an effective hearing on restoration and, if restored, on the appeal itself. Here, the High Court directed the appellate tribunal to decide the restoration application within six weeks and stayed recovery proceedings for the interim period, subject to the assessee depositing 25% of the disputed amount within the stipulated time. The relief was moulded to balance expeditious consideration of the restoration request with protection of revenue interests, so that coercive steps would not proceed before the restoration issue was decided.

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Issues: Whether the pending restoration application in the tax appeal should be decided within a fixed time and whether recovery proceedings for the alleged tax dues should be stayed till such decision.

Analysis: The writ petition arose from recovery notices issued during the pendency of a restoration application filed against the dismissal for default of the statutory appeal. The Court considered that the appeal had been dismissed for non-appearance despite adjournments and that the restoration request was pending before the appellate tribunal. To secure an effective opportunity of hearing on the restoration application, and if restoration were allowed, on the appeal itself, the relief was moulded in the interest of justice. The Court also balanced the interests of recovery by directing protection against coercive steps only on condition of an additional deposit of 25% of the disputed amount within the stipulated time.

Conclusion: The restoration application was directed to be decided within six weeks, recovery proceedings were stayed for the stipulated period and subject to the stated deposit condition, and the writ petition was allowed in part in favour of the assessee.

Final Conclusion: The Court granted conditional interim protection against recovery while ensuring expeditious consideration of the restoration request, thereby preserving the assessee's opportunity to pursue the appeal on merits.

Ratio Decidendi: Where a restoration application against dismissal of a tax appeal is pending, the writ court may mould relief to secure a hearing on that application and temporarily restrain coercive recovery, subject to appropriate deposit conditions.

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