The main legal point established in the judgment is that the High Court has the inherent or incidental power to grant stay pending disposal of a revision under Section 23 or appeal under Section 24 of the Karnataka Sales Tax Act, 1957.

R. V. RAVEENDRAN, J.

( 1 ) A Division Bench of this Court, has by an order dated 16-9- 2003, referred the following question of law for the opinion of a Full bench: whether the High Court has the power to grant interim order of stay of recovery of the tax, pending, disposal of a Revision Petition filed by the assessee under Section 23 (1) of the karnataka Sales Tax Act, 1957. Facts and reason for reference:

( 2 ) THE petitioner filed a Revision Petition under Section 23 (1) of the Karnataka Sales Tax Act, 1957 ('act' for short) challenging the order dated 26-10-2002 passed in STA 361/2000 by the karnataka Appellate Tribunal. In the said proceedings, the petitioner filed IA. I/ 03 under section 151 CPC praying for stay of recovery of the balance of the disputed amount of tax pending disposal of the Revision Petition. The State resisted the application by contending that there is no inherent power in this Court to grant interim orders while exercising revisional power under Section 23 or appellate power under Section 24 of the Act. Reliance was placed on the decision in Mec Wires v. State of Karnataka, 113 (1999) STC 391 in support of the said contention.

( 3 ) THE Division Bench which heard the application was of the view that the decision in M. E. C. WIRES required reconsideration, for the following reasons.

" (a) When the High Court entertains a revision petition, being satisfied prima facie that the order of the Tribunal suffers from errors which give raise to substantial questions of law, denial of interim stay on the ground that there is no express provision would result in serious and irreparable injury. This is more so because if ultimately it is found that the assessee is not liable, he will not even be entitled to interest on the tax paid, having regard to the proviso to sub-section (6) of Section 23. (b) The revisional power conferred on the High Court empowers the Court to reverse, affirm, or amend the order against which the Revision Petition is filed (or to remit the matter to the appellate Tribunal) and pass such other order as the High Court thinks fit. This makes the revisional jurisdiction similar to appellate jurisdiction. Such wide power is to be understood as including all incidental and ancillary powers necessary to make effective the revisional power under Section 23 of the Act. One such incidental/ancillary power is to grant interim stay, so as to maintain status quo and prevent recovery of balance tax in cases where the Court is satisfied that the matter involves an important question of law which has been wrongly decided or not decided at all by the Tribunal. (b) Section 23 (6) of the Act is in the nature of an instruction to the assessee that mere filing of a revision petition under Section 23 (1) of the Act, does not absolve the assessee of his liability to pay the tax as per the order under challenge. Section 23 does not contain any provision prohibiting grant of interim stay. (d) The two decisions relied on in MEC WIRES (the decision of the Supreme Court in VIJAY prakash D. MEHTA v. COLLECTOR OF CUSTOMS and the decision of the Delhi High court in NARULA TRADING AGENCY v. COMMISSIONER, SALES TAX 1981 (47) STC 45 were rendered with reference to statutory provisions differently worded when compared to section 23 and therefore inapplicable. On the other hand the decision of the Supreme Court in income TAX OFFICER v. M. K. MOHAMMED KUNH, 1969 (71) ITR 815 holding that the statutory power of appeal carries with it, the duty in appropriate cases, to make orders staying recovery pending appeal, would apply to exercise of power under Section 23 and 24 of the Act. Rival Contentions"

( 4 ) LEARNED Counsel for the assessee submitted that in the absence of an express provision in the statute, prohibiting grant of stay, Sub-section (6) of Section 23 will not come in the way of High court granting interim stay, in exercise of the inherent power in the High Court which is incidental and ancillary to the power ves

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