Stay of demand depends on prima facie merits and hardship; the 20% deposit norm is only a guiding reference point.

In stay of demand matters, the authority must exercise discretion on the facts of each case, weighing prima facie merits, balance of convenience, undue hardship, and protection of the Revenue's interests. The Delhi High Court held that the impugned refusal to grant interim protection and insistence on pre-deposit disclosed no legal infirmity warranting writ interference, as the appellate forum had considered the relevant stay factors and prior findings on the genuineness of the transaction. The Court also reiterated that the 20% deposit norm is only a reference point and not a rigid pre-condition, though that principle did not assist the petitioner on the facts.

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Issues: (i) Whether the challenge to the order refusing interim protection against recovery and insisting on a pre-deposit was sustainable. (ii) Whether the requirement of a 20% deposit operated as an inflexible rule in deciding stay of demand.

Issue (i): Whether the challenge to the order refusing interim protection against recovery and insisting on a pre-deposit was sustainable.

Analysis: The Court noted that the appellate forum had considered the existence of a prima facie case, the surrounding circumstances, and the prior findings touching the genuineness of the transaction. The impugned order reflected application of mind to the relevant stay factors and the challenge did not disclose any legal infirmity warranting interference in writ jurisdiction.

Conclusion: The challenge was unsustainable and the refusal to interfere was in favour of the Revenue.

Issue (ii): Whether the requirement of a 20% deposit operated as an inflexible rule in deciding stay of demand.

Analysis: The Court reaffirmed that the administrative guidance on 20% deposit is only a standard reference point and does not curtail the quasi-judicial discretion to grant stay on a lesser deposit or on terms suited to the facts. The controlling considerations remain prima facie case, balance of convenience, undue hardship, and protection of the Revenue's interests.

Conclusion: The 20% requirement was not an inviolable mandate, but that did not aid the petitioner on the facts of the case.

Final Conclusion: The writ petition was dismissed, and the Revenue's recovery stance was left undisturbed.

Ratio Decidendi: In considering stay of demand, the authority must exercise discretion on the facts of each case, guided by prima facie merits, hardship, and revenue protection, and a 20% deposit guideline cannot be treated as a rigid pre-condition.

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