The only issue with which the high court was concerned was with the recovery made from bank accounts the assessee, on the very
next day of rejection of the appeal.
-Applicability of Provisions of Section 78-High Court observed that Section 78 allows three-month time to taxable person to pay amount due
from date of service of order. Proviso to section 78 enables proper officer in expedient situations, for reasons recorded in writing, to require taxable
person to make such payment within such period, less than a period of three months, as may be specified by him.
-Even if coercive action to be taken, it has to be taken for 20% of Tax Amount- The Legislature had, in the event of an appeal filed to the
Tribunal, only intended twenty percent of the tax dues alone to be paid; on which payment the entire demand was liable to be stayed till the
disposal of the appeal. Thus, even if coercive action could have been taken the tax officer should have confined it to the twenty percent of the
total amounts assessed, in addition to the ten percent paid at the first appellate stage and any admitted tax, if remaining unpaid.
-Guidelines for Recovery- High Court following dictum laid down in UTI Mutual Fund v. Income-Tax Officer and Others;  345 ITR 71
(Bom), issued following guidelines in so far as the recoveries are concerned:-
1. There shall be no recovery of tax within the time limit for filing an appeal and when a stay application is filed in a properly instituted appeal,
before the stay application is disposed of by the Appellate Authority;
2. Even when the stay application in the appeal is disposed of, the recovery shall be initiated only after a reasonable period so as to enable the
assessee to move a higher forum;
3. However, in cases where the Assessing Officer has reason to believe that the assessee may defeat the demand or that it is expedient in the
interest of Revenue, as is provided under the proviso to Section 78, there can be a recovery but with notice to the assessee, which notice
shows the reasons for initiating it and specifies the lesser time within which the assessee is directed to satisfy the dues;
4. Though a bank account could be attached; before withdrawing the amount, reasonable prior notice should be furnished to the assessee to
enable the assessee to make a representation or seek recourse to a remedy in law;
Therefore, when an Appellate Authority was not constituted even when the Assessing Officer acted under the proviso to Section 78 what could
have been recovered is only twenty per cent of the tax amount due in addition to that paid up to institute a first appeal. The High Court also held
that the officer who acted in complete derogation of the statutory provisions and established principles of law, should pay an amount of Rs. 5,000/-
(five thousand) as cost to the assessee; a receipt of which shall be filed within two weeks in the instant writ petition