Conditional stay of tax recovery may issue in writ jurisdiction where balance of convenience supports interim protection

Stay of recovery pending second appeal under the Odisha Entry Tax Act is discretionary, and a writ court may still grant limited interim protection where the balance of convenience justifies it. Where the assessee had not adequately explained non-production of supporting documents before the assessing and appellate authorities, unconditional stay was refused. However, in view of the pre-deposit already made, conditional protection against coercive recovery was allowed on deposit of 30% of the balance demand within the stipulated time, failing which the revenue could proceed in accordance with law.

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Issues: Whether stay of realization of the balance tax demand pending the second appeal before the Tribunal was warranted, and what interim protection should be granted in the writ jurisdiction.

Analysis: The disputed demand arose from audit assessment under the Odisha Value Added Tax Act, 2004 and the Odisha Entry Tax Act, 1999, where the authorities proceeded on the basis that mandatory supporting documents, including C Forms and mining permits, had not been produced. The writ Court noted that the Commissioner's power under Section 17(7) of the Odisha Entry Tax Act, 1999 to stay recovery pending the second appeal was discretionary, and that the petitioner had not shown sufficient justification for non-production of material before the assessing and appellate authorities. At the same time, the Court took note of the pre-deposit already made and considered it appropriate, for maintaining the balance of convenience, to grant conditional interim protection against coercive recovery.

Conclusion: The prayer for unconditional stay was not accepted, but conditional protection against recovery was granted on deposit of 30% of the balance demand within the stipulated time; failing compliance, the revenue authorities were left free to proceed in accordance with law.

Final Conclusion: The writ proceeding was finally disposed of with limited interim relief in favour of the petitioner, subject to compliance with the directed deposit.

Ratio Decidendi: Relief against recovery pending statutory appeal may be granted in the exercise of writ jurisdiction on a conditional basis, where the Court balances the parties' interests and the statutory authority's discretionary refusal to stay recovery is not found wholly unjustified.

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