The prima facie case and the precedents are key to the jurisprudence in the recovery matters.
Keeping this approach into account the High Court bench of Dr D Y Chandrachud in 2 ITR-OL 486 (Bom) held that no public authority, including the Revenue can ignore the principle of precedent. Certainly in tax administration, it is of cardinal importance and its absence undermines public confidence.
In considering whether a stay of demand should be granted, the court is duty bound to consider not merely the issue of financial hardship, if any, but also whether a strong prima facie raising a serious triable issue has been raised. Where the issue has raised a strong prima facie case which requires serious consideration a requirement of pre-deposit would itself be a matter of hardship.
in the case of MMRDA v. Deputy DIT (Exemption) in Writ Petition (Lodg) No. 2348 of 2014, dated October 29, 2014 the following further guidance is inked in dealing with stay matters :-
A) financial hardship is a factor which may have some bearing, if the authorities concerned are not convinced on a strong prima facie case in favour of the applicant;
B) To illustrate a strong prima facie case would be where, the issue is covered by the decision of a superior forum or by a consistent practice to the contrary being followed by the Revenue in the case of the assessee in the earlier years.
The Court noticed two Division Bench judgments matching to the case of the assessee hereinabove.