V.SHAREEF, vs. DEPUTY COMMISSIONER OF INCOME TAX,

The learned counsel for the petitioner has strenuously contended that the Ext.P24 cannot be termed 'an order'. It is a mere statement or directive from the authority that the petitioner should deposit 20% of the demand to have the recovery proceedings stayed and to have the appeal heard on merits. In this context, the learned counsel strenuously contends that though the appellate authority has a discretion to stay the proceedings conditionally, the discretion must be exercised in the judicially varifyable manner and that requires an order impugned with reasons. He also reminds the Court that time and time again the Courts have held that any judicial directive which is non-speaking cannot be sustained.

The learned Standing Counsel, on the other hand, submitted that the appellate authority has a discretion to pass conditional orders. He has also submitted that the authority has perhaps been guided by the Department Circulars in force.

Heard the learned counsel for the petitioner and also the learned Government Pleader for the respondents.

Ext.P24 order, cryptic as it is, reads as follows: “xxxxxxx With respect to your above request, this is to inform you that stay of demand in your case can only be granted if you have deposited 20% of the total outstanding demand. In case you have paid the aforesaid demands, the recovery proceedings for the aforesaid demands are to be stayed till the disposal of your appeals before the undersigned. xxxxxxx”

As contended by the learned counsel for the petitioner, the appellate authority may have exercised its discretion but the manner of that exercise has not been spelt out in the Ext.P24. No doubt, an interim order, especially in the nature of a stay order, does not require detailed reasoning for adjudication. At the same time, the order must spell out the authority's prima facie opinion of the matter. And that is lacking here: The circular, the Standing Counsel has relied on, as produced now before the Court, does not seem to bind the appellate authority, though it binds at the lower echelons. Under these circumstances, I set aside the Ext.P24 and remand the matter to the appellate authority for fresh consideration of the stay petition. At any rate, it is left open for the appellate authority either to pass orders after hearing the petitioner or dispose of the appeal itself as per its convenience. Until the appellate authority acts in either way, the Department will defer coercive steps.