Instalment relief under entry tax law: tax and interest secured in stages while penalty recovery stayed pending appeal

Pending disposal of a second appeal under the Orissa Entry Tax Act, 1999, the Court applied the statutory stay framework under Section 7(5) read with Section 16(4) and declined to examine the assessment merits. To balance revenue protection with appellate relief, it directed the assessee to pay the quantified tax and interest in three equal instalments. Recovery of the penalty component was kept in abeyance until the second appeal is decided, giving only partial interim relief while preserving the disputed penalty demand for later consideration.

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Issues: Whether, pending disposal of the second appeal under the Orissa Entry Tax Act, 1999, the demand for tax, interest and penalty could be protected by granting instalment relief and by staying recovery of the penalty.

Analysis: The writ challenge arose from rejection of stay of demand during pendency of the second appeal. The Court declined to enter upon the merits of the assessment dispute and instead proceeded on the statutory scheme under Section 7(5) read with Section 16(4) of the Orissa Entry Tax Act, 1999. In the interest of justice, it found it appropriate to secure the revenue by directing payment of the quantified tax and interest in three equal instalments, while keeping the penalty component under protective restraint until the appeal is decided.

Conclusion: The assessee was granted partial relief by way of instalment payment for tax and interest, and recovery of penalty was stayed till disposal of the second appeal.

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