Stay of tax recovery during appeal requires recorded reasons; additional deposit can justify protection of the disputed demand.

Where a statutory appeal is pending and the required pre-deposit has already been made, recovery of the balance disputed tax should ordinarily be stayed unless special reasons are recorded. The court held that refusal of stay without cogent reasons was unjustified and that the appellate framework permits stay on conditions under Section 33(b) of the Andhra Pradesh Value Added Tax Act, 2005. It therefore set aside the impugned order and protected recovery of the balance demand during the appeal, subject to an additional 25% deposit, bringing the total deposit to 50%.

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Issues: Whether rejection of the stay application, during pendency of the statutory appeal, was justified and whether recovery of the balance disputed tax should remain stayed subject to additional deposit.

Analysis: The appeal was pending before the appellate tribunal and the statutory pre-deposit for filing the appeal had already been made. In such circumstances, recovery of the balance demand ordinarily deserves to be stayed unless special reasons are recorded. The impugned order did not disclose cogent reasons for refusing stay. The statutory framework also permits stay subject to conditions under Section 33(b) of the Andhra Pradesh Value Added Tax Act, 2005. Considering the previous deposit and the balance of convenience, further deposit could be directed as a condition for stay.

Conclusion: The rejection of the stay application was unjustified. The impugned order was set aside and recovery of the balance amount was stayed during pendency of the appeal on the condition of an additional 25% deposit, making the total deposit 50%.

Ratio Decidendi: Where a statutory appeal is pending and the required pre-deposit has been made, recovery of the balance demand should ordinarily be stayed unless special reasons are recorded, and stay may be granted on appropriate conditions.

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