Raju J.
1. The above writ petitions have been filed by one and the same writ petitioner, though relating to different assessment years, viz., 1987-88 to 1990-91, respectively, for writs of mandamus directing the third respondent to pass appropriate orders, staying the collection of the disputed tax and interest relating to those assessment years. Before adverting to the grievance and the contentions of the respective parties, it would be useful to refer to the circumstances which led the petitioner to approach this court. The petitioner is a partnership firm and was said to be an assessee on the file of the first respondent, holding permanent account No. 49-001-FV-2540. The petitioner was carrying on business of printing and sale of labels during the relevant assessment years, and according to the petitioner, it has been regularly submitting the return of income. The assessment relating to the petitioner was also said to have been completed up to the assessment year 1992-93 and the petitioner's return for the year 1993-94 is under preparation for being filed.
2. So far as the assessment years 1987-88, 1988-89 and 1989-90 are concerned, the petitioner was said to have been assessed on the basis of its returns under section 143(1)(a) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act'), as hereunder :
:22 'Assessment year Income/loss declaredRs.1987-88 66,270 (income)1988-89 43,980 (loss)1989-90 Nil.'
3. Thereafter, it appears the Income-tax Officer issued notice under section 148 of the Act, proposing to revise the assessment already completed for the reason that the petitioner had not included in the income returned for assessment, a sum of Rs. 2,66,939, Rs. 2,74,553 and Rs. 2,88,546 for the assessment years 1987-88, 1988-89 and 1989-90, respectively. The said amount were the collections said to have been made by the petitioner as contingency collections towards the possible liability to sales tax in respect of certain transactions relating to works contract. The stand of the petitioner appears to be that the transaction does not constitute taxable sale and consequently there was no liability to sales tax, and since there were certain doubts about the liability, it was agreed between the petitioner and their customers that in the event of the transaction being held not liable to sales tax. The amount collected will be refunded to the customers, and that, therefore, the said amounts did not form part of its trading receipts. They have been impressed with the character of a trust for the reason that the amount was either payable to the State by way of sales tax or refundable to the customers themselves. It is on that account the petitioner would claim to have not included the same in the return of income for the respective years. The first respondent appears to have issued due notices in accordance with law and completed revision of assessment and redetermined the income in respect of the assessment years referred to Rs. 3,60,720, Rs. 2,77,130 and Rs. 2,84,830, respectively. Apart from this, the first respondent also appears to have added back the depreciation claim by the petitioner in respect of the value of the plant and machinery to the extent of the subsidy received by the petitioner from the Government.
4. So far the assessment year 1990-91 is concerned, the petitioner claims to have submitted a return declaring an income of Rs. 1,36,930. The amount collected by the petitioner towards sales tax liability amounted to Rs. 3,72,731 and the petitioner was said to have been accordingly assessed on a total income of Rs. 6,04,820. Apart from the levy of tax, the Income-tax Officer also appears to have levied interest under sections 139, 215, 216 and 217 for the assessment years 1987-88 and 1988-89 and under section 234A, 234B, 234C in respect of the subsequent years. The details of the tax and interest in respect of the above assessment years are as hereunder :
---------------------------------------------------------------------| Assessment year | Tax | Interest | Total ||---------------------|--------------|-----------------|-------------|| | Rs. | Rs. | Rs. || 1987-88 | 67,632 | 59,120 | 1,26,752 || 1988-89 | 55,138 | 36,688 | 91,826 || 1989-90 | 57,078 | 45,585 | 1,02,663 || 1990-91 | 1,11,748 | 90,461 | 2,02,209 || | --------- | -------- | --------- || | 2,91,596 | 2,31,854 | 5,23,450 || | --------- | --------- | --------- |
5. It is also claimed that the entire undisputed liability in respect of the tax was discharged and what remains to be is the balance of disputed tax and interest levied.
6. As against the aforesaid assessments, the petitioner filed appeals before the Commissioner of Income-tax (Appeals), the third respondent, challenging the addition of the amounts collected towards sales tax liability, which did not, according to the petitioner, constitute income or form part of the trading receipts. The disallowance of depreciation to the extent of the subsidy received from the Government was also challenged. Along with the appeals, the petitioner also filed petitions before the first respondent to stay the collection of the tax and to treat the petitioner as not in default. The first respondent, however, did not accede to the prayer and was said to have directed the petitioner to pay the entire tax and interest on or before December 31, 1993. Since the petitioner was not in a position to pay the amounts in terms of the said directions issued by the first respondent, the petitioner approached the second respondent for stay of collection of the disputed liability. The second respondent also was not inclined to accept the prayer of the petitioner for stay of the collection of the disputed liability, pending disposal of the appeals.
7. Thereupon, it appears the petitioner filed petitions before the third respondent, the appellate authority, seeking stay of collection of the disputed tax and interest, which is said to be directly the subject-matter in issue raised and pending in the appeals before the third respondent. While the matter stood thus, the first respondent appears to have issued a notice under section 226(3) of the Act to the bankers of the petitioner, calling upon them to deposit all the moneys held by them on account of the petitioner to the Income-tax Department in settlement of the above-referred tax liability of the petitioner.
8. Though the petitioner also made submissions in the affidavits in support of the writ petitions that the first and second respondents erred in rejecting the request for the grant of stay in a summary manner, in spite of the petitioner claiming to have a prima facie case and the financial constraints, learned counsel for the petitioner advanced arguments on the only ground that the third respondent-appellate authority - is bound to stay the disputed demand during the pendency of the appeals, having regard to the ratio of the decision of the Supreme Court in ITO v. M. K. Mohammed Kunhi [1969] 71 ITR 815. It was also contended that the power to stay the collection of the disputed tax is a power incidental and ancillary to the appellate jurisdiction and, therefore, the third respondent ought to have granted stay as prayed for. Learned counsel would contend that the petitioner has satisfied the requirements of law to entitle them for a stay of the disputed demands and the third respondent ought to have acceded to the request for stay. It is claimed that the third respondent has not so far passed orders on the petitions presented for stay of the disputed demands.
9. Learned counsel for the Revenue represented that the third respondent had not been conferred with any powers under the Act and that the ratio of the decision of the Supreme Court relied upon for the petitioner will have no application to the third respondent. According to learned counsel for the Revenue, the decision of the Supreme Court had relevance to the powers of the Tribunal and not to the appellate authority of the Income-tax Department, though exercising powers under the Act. Before undertaking the consideration of the merits and demerits of the contentions of the respective counsel appearing on either side, it would be useful to refer to various judicial pronouncements brought to my notice with the declaration of law and the principles laid down therein. The above decision in ITO v. M. K. Mohammed Kunhi [1969] 71 ITR 815 is that of the Supreme Court. That was a case where the court was concerned with the powers of the Tribunal under section 254 of the Act. The court specifically adverted to the fact that under the provisions of the Act or the Income-tax Appellate Tribunal Rules, 1963, powers have not been expressly conferred upon the Appellate Tribunal to stay proceedings relating to the recovery of penalty or tax due from an assessee. It also adverted to the position that under section 220(6) of the Act, power of stay by treating the assessee as not being in default during the pendency of the appeal, has been given to the Income-tax Officer only when the appeal has been presented under section 246 to the Appellate Assistant Commissioner and not to be Appellate Tribunal. The provision of section 225 was also adverted to. To highlight the power of the Tax Recovery Officer also to grant extension of time for paying the until the disposal of the appeal, a reference has also been made to the practice prevailing in the Department of the Commissioner or the Inspecting Assistant Commissioner in exercise of administrative powers giving necessary relief of stay of the recovery of the tax. The Revenue specifically contended before the Supreme Court that in the absence of any express provision in section 254 and 255 of the Act relating to stay of recovery during the pending of an appeal, it must be held that no such power can be exercised by the Tribunal. This plea was repelled by the Supreme Court in the following terms (at page 818) :
'The argument advance on behalf of the appellant before us that, in the absence of any express provisions in sections 254 and 255 of the Act relating to stay of recovery during the pendency of an appeal, it must be held that no such power can be exercised by the Tribunal, suffers from a fundamental infirmity inasmuch as it assumes and proceeds on the premise that the statute confers such on the Income-tax Officer who can give the necessary relief to an assessee. The right of appeal is a substantive right and the questions of fact and law are at large and are open to review by the Appellate Tribunal. Indeed, the Tribunal has been given very wide powers under section 254(1), for it may pass such orders as it thinks fit after giving full hearing to both the parties to the appeal. If the Income-tax Officer and the Appellate Assistant Commissioner have made assessments or imposed penalties raising very large demands and if the Appellate Tribunal is entirely helpless in the matter of stay of recovery, the entire purpose of the appeal can be defeated if ultimately the orders of the Departmental authorities are set aside. It is difficult to conceive that the Legislature should have left the entire matter to the administrative authorities to make such orders as they choose to pass in exercise of unfettered discretion. The assessee, as has been pointed out before, has no right to even move an application when an appeal is pending before the Appellate Tribunal under section 220(6) and it is only at the earlier stage of appeal before the Appellate Assistant Commissioner that the statute provides for such a matter being dealt with by the Income-tax Officer. It is a firmly established rule that an express grant of statutory power carries with it by necessary implication the authority to use all reasonable means to make such grant effective (Sutherland's Statutory Construction, third edition, articles 5401 and 5402). The powers which have been conferred by section 254 on the Appellate Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers fully effective....
It is well known that the Income-tax Appellate Tribunal is not a court, but it judicial powers. The Tribunal's powers in dealing with appeals are of the widest amplitude and have in some cases been held similar to and identical with the powers of an appellate court under the Civil Procedure Code : See CIT v. Hazarimal Nagji and Co. : [1962]46ITR1168(Bom) and New India Life Assurance Co. Ltd. v. CIT/CEPT : [1957]31ITR844(Bom) ....
Section 255(5) of the Act does empower the Appellate Tribunal to regulate its own procedure, but it is very doubtful if the power of stay can be spelt out from that provision. In our opinion, the Appellate Tribunal must be held to have the power to grant stay as incidental or ancillary to its appellate jurisdiction. This is particularly so when section 220(6) deals expressly with a situation when an appeal is pending before the Appellate Assistant Commissioner, but the Act is silent in that behalf when an appeal is pending before the Appellate Tribunal. It could well be said that when section 254 confers appellate jurisdiction, it impliedly grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution and that the statutory power carries with it the duty in proper cases to make such orders for staying proceedings as will prevent the appeal if successful from being rendered nugatory.
A certain apprehension may legitimately arise in the minds of the authorities administering the Act that, if the Appellate Tribunal proceeds to stay recovery of taxes or penalties payable by or imposed on the assessees as a matter of course, the Revenue will be put to great loss because of the inordinate delay in the disposal of appeals by the Appellate Tribunal. It is needless to point out the power of stay by the Tribunal is not likely to be exercised in a routine way or as a matter of course in view of the special nature of taxation and revenue laws. It will only be when a strong prima facie case is made out that the Tribunal will consider whether to stay the recovery proceedings and on what condition, and the stay will be granted in the most deserving and appropriate cases where the Tribunal is satisfied that the entire purpose of the appeal will be frustrated or rendered nugatory by allowing the recovery proceedings to continue during the pendency of the appeal.'
10. The principle in the above decision was followed and applied by a Division Bench of this court in the decision in First GTO v. A. A. Annamalai Nadar : [1970]77ITR608(Mad) in respect of matter arising under section 23(5) of the Gift-tax Act, 1958. In V. N. Purushothaman v. Agrl. ITO : [1984]149ITR120(Ker) , a learned single judge of the Kerala High Court had an occasion to consider an issue under the Kerala Agricultural Income-tax Act, 1950. The question that fell for consideration of the learned single judge was as to whether the Appellate Assistant Commissioner exercising powers under the Kerala Agricultural Income-tax Act, 1950, had the power to grant stay. Under the provisions of the said enactment also, there was no specific conferment of such power on the Appellate Assistant Commissioner. But the proviso to section 40 only empowered the Agricultural Income-tax Officer at his discretion to treat an assessee, who has presented an appeal under section 31 of the said Act, as not being in default so long as such appeal remained undisposed of. While holding that the appellate authority had such power to order stay of the recovery of the tax pending appeal, the learned judge adverted to the earlier decisions on the subject of the Supreme Court as well that of the very High Court and also referred to the axiomatic principle that has come to stay as a maxim of law that to whomsoever the jurisdiction is given, those things also are supposed to be granted, without which the jurisdiction cannot be exercised.
11. In State of Orissa v. Member, Sales Tax Tribunal [1971] 28 STC 652, a Division Bench of the Orissa High Court had occasion to deal with a similar issue arising under the Orissa Sales Tax Act, 1947. In the said Act, a proviso to section 23 was said to have been introduced by the Orissa Sales Tax (Amendment) Act, 1968, conferring power on the Commissioner of Commercial Taxes to grant stay even during the pendency of the appeal before the Tribunal. The Division Bench of the Orissa High Court held that the theory of implied power is to be invoked in the absence of express provision for exercise of the appellate jurisdiction in an effective manner and that before the 1968 Amendment Act, since there was no express provision conferring power on any authority to grant stay during the pendency of second appeal before the Sales Tax Tribunal, the theory of implied power had full application and the Tribunal had the power to grant stay. It also clarified the position that after the introduction of the proviso to section 13(5) in the year 1968, the power to grant such stay would not be implied as essentially necessary to the effective exercise of its jurisdiction.
12. In Swathi Traders v. CTO [1990] 76 STC 393, a learned single judge of the Karnataka High Court had occasion to consider a similar issue arising under the Karnataka Sales Tax Act, 1957, and the Karnataka Appellate Tribunal Act, 1976, and the Karnataka Appellate Tribunal Regulations, 1979. By enacting the Karnataka Sales (Amendment) Act, 1988, an amendment was introduced to section 22 of the Karnataka Sales Tax Act, taking away the power of the Appellate Tribunal to grant stay of payment of tax or penalty or any other amount payable during the pendency of the appeals filed against any order passed by the Assistant Commissioner of Commercial Taxes or the Deputy Commissioner of Commercial Taxes. The learned judge, on a review of the case-law replied upon before him, culled out the emerging position and principles of law as hereunder (at page 406) :
'(i) a right of appeal is not a mere matter of procedure, but is a substantive right;
(ii) the right of appeal is a vested right which is governed by the existing law before amendment;
(iii) such vested right which inheres in a party at the commencement of the proceedings under the Karnataka Sales Tax Act, cannot be destroyed by a subsequent amendment; and
(iv) the impugned amendment taking away the power to grant stay in fit cases, is opposed to the very concept of vesting appellate powers in an authority.'
13. In Basant Kumari v. State of MP, : AIR1990MP160 , a Division Bench of the Madhya Pradesh High Court had occasion to consider a similar issues arising under the Madhya Pradesh Ceiling on Agricultural Holdings Act, 1960. The Division Bench was concerned with the validity of a provision contained under section 42A of the Act, inserted in 1989, that in any appeal or revision directed against the order passed by the competent authority, no stay shall be granted by the appellate or revisional authority. On a review of the relevant case-law and after adverting to the above decision in CIT v. M. K. Mohammed Kunhi [1969] 71 ITR 815, the Division Bench held that such a provision would be violative of the rule of law and liable to be struck down. The court further was of the view that for the effective exercise of appellate jurisdiction, an appellate authority is entitled to grant stay and any denial or deprivation of such a power in an appellate authority would constitute an encroachment by the Legislature on the judicial power exercised by the appellate or revisional authority.
14. In CIT v. Bansi Dhar and Sons : [1986]157ITR665(SC) , the Supreme Court had occasion to consider the scope of the powers of the Appellate Tribunal to grant stay pending adjudication of the reference made to the High Court. The conclusions of the Supreme Court are as hereunder (at page 681) :
'In an appropriate case, if the assessee feels that a stay recovery pending disposal of the reference is necessary or is in the interest of justice, then the assessee is entitled to apply before the appellate authority to grant a stay until disposal of the reference by the High Court or until such time as the appellate authority thought fit. But in case the appellate authority acted without jurisdiction or in excess of jurisdiction or in improper exercise of the jurisdiction, then the decision of such appellate authority can be corrected by the High Courts by issuing appropriate writs under articles 226 and 227 of the Constitution.
It has to be borne in mind that in answering questions or disposing of references either under section 66 of the 1922 Act or section 256 of the 1961 Act, the High Court do not exercise any jurisdiction conferred upon them by the Code of Civil Procedure or the Characters or by the Acts establishing the respective High Courts. In respect of certain matters, jurisdiction exercised by the High Court must be kept separate from the concept of inherent powers of incidental powers in exercising jurisdiction under section 66 of the 1922 Act or section 256 of the 1961 Act. Section 66 of the Indian Income-tax Act of 1922, or section 256 of the Income-tax Act 1961, is a special jurisdiction of a limited nature conferred not by the Code of Civil Procedure or by the Charters or by the special Acts constituting such High Court but by the special provisions of the Income-tax Acts of 1922 or 1961 for the limited purpose of obtaining the High Court's opinion on questions of law. In giving that opinion properly, if any question of incidental or ancillary power arises such as giving an opportunity or restoring a reference dismissed without hearing or giving some additional time to file the paper book, such powers inhere to the jurisdiction conferred upon it. But such incidental powers cannot be so construed as to confer the power of stay of recovery of taxes pending a reference which lie in the domain of an appellate authority. Therefore, the concept of granting stay in a reference ex debito justitiae does not arise. That concept might arise in the case of the appellate authority exercising its power to grant stay where there is no express provision. Ex debito justitiae is to do justice between the parties.
Rendering advice on the question of law referred to the courts has nothing to do with the recovery of taxes or granting stay in respect of the same.
Therefore, in our opinion, it cannot be said that the High Court has inherent power or incidental power in the matter of a reference pending before it to grant stay of realisation or to grant injunction. That must remain within the jurisdiction of the appellate authority and pendency of a reference does not detract from that jurisdiction of the appellate authority. In our opinion, therefore, the High Court was in error in exercising its jurisdiction by passing an order for stay of realisation under section 151 of the Code of Civil Procedure in a pending reference. The High Court could have exercised its power if the appellate authority had not properly exercised its jurisdiction, not in reference jurisdiction but by virtue of its jurisdiction under article 226 or article 227 in appropriate cases. But that was not the case here.'
15. In Jute Corporation of India Ltd. v. CIT : [1991]187ITR688(SC) , the Supreme Court had occasion to consider the scope and extent of powers of the first appellate authority under section 251(1)(a) of the Act in the context of a right to entertain an additional ground, which was not raised before the authority below. The court held that an appellate authority has all the powers, which the original authority may have in deciding the question before it subject to the restrictions or limitations, if any, prescribed by the statutory provisions themselves, and in the absence of any statutory provision, the appellate authority shall be considered to be vested with all the plenary powers, which the subordinate authority may have in the matter, and there is absolutely no good reason to justify curtailment of such power of the appellate authority under section 251(1)(a) of the Income-tax Act, 1961.
16. Learned counsel for the Revenue, while trying to rely upon some of the passages in the very decisions relied upon by learned counsel for the petitioner as above, in addition placed reliance upon the decision in Vetcha Sreeramamurthy v. ITO : [1956]30ITR252(AP) . The said decision was that of a Division Bench of the Andhra Pradesh High Court, and no doubt, Viswanatha Sastri J., who wrote a separate opinion, opined that neither the Appellate Assistant Commissioner nor the Appellate Tribunal was given the power to stay the collection of taxes, and whether the law should not be made more liberal so as to enable an assessee, who had preferred an appeal, to obtain from the appellate forum a stay of collection of the tax either in whole or in part on furnishing suitable security is a matter for the Legislature to consider. In the light of the subsequent authoritative pronouncement of the Supreme Court in the decision in ITO v. Mohammed Kunhi (M. K.) [1969] 71 ITR 815, learned counsel for the Revenue cannot draw any inspiration or support from the observations of the learned judge.
17. The endeavour of learned counsel for the Revenue to rely upon some of the observations of the Supreme Court in the decision in CIT v. Bansi Dhar and Sons : [1986]157ITR665(SC) , about the powers of the High Court to grant stay pending a reference before it, in may view, is nothing but a futile exercise, so far as the case on hand is concerned. In my view, the principles enunciated in the said decision, vis-a-vis the appellate authority by drawing specifically the inherent differences in the nature of exercise of powers by an appellate authority, in contradistinction to the powers exercised by the High Court in a reference, is a sufficient answer to the claim made by learned counsel for the Revenue. Likewise the attempt of learned counsel for the Revenue to confine the ratio of the decision in ITO v. M. K. Mohammed Kunhi [1969] 71 ITR 815 to only powers exercisable by the Appellate Tribunal is wholly unjustifiable. Placing such a restricted construction on the principles of law enunciated by the Supreme Court would amount to doing violence to the language as well as to the ratio of the said decision.
18. The main and only objection of learned counsel for the respondents is that there is no specific conferment of power upon the appellate authority exercising powers under section 251 of the Act and during the pendency of such an appeal, it is only the Income-tax Officer and the Tax Recovery Officer who has been conferred with power either to treat the assessee as not in default or postpone the recovery by granting time from time to time and therefore the appellate authority cannot be considered to be in possession of powers to grant stay of collection pending disposal of the appeal filed. There is no controversy over the fact that the Supreme Court had held in unmistakable terms that pending disposal of an appeal filed before the Appellate Tribunal under section 254, the Tribunal had got such powers even though there is no specific provision conferring such power on the Tribunal. This power of the Tribunal was considered to enure to the Tribunal to grant such orders of stay even during the pendency of a reference made to High Court under section 256 of the Act. The declaration of law by the apex court of our country remains undisturbed either on account of any subsequent decision to the contrary or a statutory amendment to the Act. Except the fact that the consideration before the Supreme Court was with reference to the Appellate Tribunal, and the issue raised before this court is with reference to the first appellate authority, there is absolutely no change in the position that basically the issue raised is one with reference to the powers to grant stay by the appellate authority, pending disposal of an appeal filed before them.
19. The Supreme Court has categorically held in ITO v. M. K. Mohammed Kunhi [1969] 71 ITR 815, that the right of appeal is a substantive right and questions of fact and law are at large and are open to be reviewed and decided untrammelled by any restrictions or inhibitions. By quoting with approval some of the earlier decisions and principles laid down therein, the Supreme Court had really approved the axiomatic principal that the power of the appellate authority to grant stay was a necessary corollary to the very power to entertain and dispose of an appeal or revision. The said decision also lends credence to the general principle that wherever the appellate authority had been invested with powers to render justice and prevent injustice, it impliedly empowers such authority also to stay the proceedings, in order to avoid causing further mischief or injustice, during the pendency of the appeal. There can be no serious dispute or controversy over the position that the powers of the appellate authority exercising powers under section 251 of the Act are as wide in their content and amplitude and are not in any manner less vigorous or of restricted amplitude and extent, when compared to that of the Appellate Tribunal under section 254 of the Act. Consequently, the ratio of the decision of the Supreme Court in ITO v. M. K. Mohammed Kunhi [1969] 71 ITR 815 would squarely apply to the present case and situation too and I have no hesitation to hold that the appellate jurisdiction conferred under section 251 of the Act impliedly grants the power of doing all such acts or employing such means as are essentially necessary to its effective exercise and that the statutory conferment of the appellate power carries with it the duty and obligation as well, in proper cases to make or grant such order for stay of the order under challenge in appeal or staying of any or all further proceedings pursuant to the said order, pending disposal of the appeal before the appellate authority.
20. The fact that provisions have been made under the Act to confer power upon the Income-tax Officer under section 220(6) of the Act to treat the assessee concerned as not in default, during the pendency of an appeal under section 246 of the Act or upon the Tax Recovery Officer, under section 225(1) of the Act, to grant further time or postpone the payment of the tax to be recovered is no substitute to the power of stay, which was considered by the Supreme Court to be a necessary adjunct to the very powers of the appellate authority. The powers conferred on the Income-tax Officer and the Tax Recovery Officer cannot be equated to the powers of the appellate authorities, either in their nature, quality or extent or vis-a-vis the hierarchy. There can be no comparison of the same with each other, they being heterogeneous in nature. Consequently, the power conferred upon the Income-tax Officer or the Tax Recovery Officer cannot be considered to be either an effective substitute so as to render nugatory or destructive of the other. The undoubted power of an appellate authority to grant stay as an adjunct to its appellate jurisdiction, cannot be denied to such authority merely because another authority lower in rank and hierarchy could grant somewhat similar result-oriented relief to an assessee, who has filed an appeal from being merely subjected to the process of coercive recovery for the realisation of the tax or penalty under dispute.
21. The further question that necessarily requires to be considered is the extent and scope of such powers. The mere filing or pendency of an appeal does not constitute an automatic stay of the order under challenge or the recovery of the tax or penalty under dispute in such appeal. The power of stay ought not to be exercised by the appellate authority in a routine way or as a matter of course, having regard to the peculiar and special nature and object of the taxation laws. Otherwise the very governance of the country and execution of various development schemes and the construction works would be brought to a standstill. The appellate authority is equally and as much obliged to judicially and judiciously exercise its discretion having due regard to the prima facie case made out, the need for imposing any just and reasonable conditions to pay in instalments or imposition of sufficient safeguards and security measures to protect the interests of the Revenue, in public interest, and ensure at the same time that the stay is granted in most deserving and appropriate cases where the appellate authority would also be satisfied that the very object of the appeal would be rendered nugatory or frustrated, if interim orders of stay as prayed for were not granted. By now the principles which should govern the grant of interim orders in the matter of stay of collection of taxes or revenue due to the State have become well-settled by many pronouncements of the Supreme Court of India as well as this court and other High Courts. There is no justification or basis to assume that the appellate authorities would throw to winds those well-settled principles in disposing of the application for stay. It is high time also that the Legislature takes note of these aspects and makes suitable provision in this regard to place the matter beyond mere guess or allow the exercise of power at the whims and fancies of officers without any uniformity in approach or guiding principles for consideration. In the light of the above view expressed by me that the appellate authority under the Act, viz., the third respondent, has the necessary powers to deal with and pass orders on the application for stay filed by the appellant, the third respondent has a duty in law to take up the applications for stay said to have been filed and dispose of them in accordance with law on the merits, after hearing the appellants or their authorised representatives.
22. For all the reasons stated above, these writ petitions shall stand partly allowed by the issue of a direction to the third respondent, Commissioner of Income-tax (Appeals), to take the applications for stay said to have been filed by the petitioner or that may be filed before him and pass appropriate orders on the relief sought for by way of stay on the merits and in accordance with law, and in the light of the observations and directions in these writ petitions. No costs.