Bombay HC issues contempt notice for enforcing sales tax demand despite unstayed judgment.
Bombay HC Upholds Rule of Law in Tax Dispute
The Bombay High Court issued a contempt notice to tax authorities for collecting a sales tax demand despite a pending appellate judgment that remained unstayed. The act was deemed a defiance of judicial order and an abuse of power.
The Court emphasized that once a judgment is pronounced, the revenue is bound by its directive unless explicitly stayed. 'Stay is not optional; it is a condition precedent to enforcement,' observed the bench.
This ruling strengthens judicial authority and cautions administrative bodies against premature execution of contested fiscal orders, protecting taxpayer rights during litigation.
